Fannie, Freddie Quietly Lift Moratorium on Foreclosures

Posted on 04/17/09 9:31 AM

Suspension Of Foreclosure Related Evictions Comes To An End

A ban on foreclosure sales and evictions from houses owned by mortgage giants Fannie Mae and Freddie Mac, which began as a high-profile effort just before the holidays to keep people in their homes as the government tried to come up with homeowner rescue plans, is over.

Fannie Mae said in a brief statement that;

“Fannie Mae’s suspension of foreclosure-related evictions concludes as of March 31, 2009″. The company has in place special foreclosure sale requirements that take into account the Making Home Affordable program. A foreclosure sale may not occur on any Fannie Mae loan until the loan servicer verifies that the borrower is ineligible for a Home Affordable Modification and all other foreclosure prevention alternatives have been exhausted.”

The agencies made a major announcement in November to roll out the ban with several major banks (e.g. Citi, BoA etc.) following suit. Although no similar statements regarding the end of the ban have been issued by these banks, it is safe to assume that most will be inclined to break the holding pattern.

Efficacy Of New Programs Uncertain

The ban on foreclosures was intended to give the government time to create homeowner rescue plans.  Now that the plan has been unveiled, it is hoped that new programs will successfully replace the ban. However, significant doubt exists as to how these plans will be perceived by lenders, the players charged with implementing the plan. A bill to allow bankruptcy judges to modify mortgages has already stalled in Congress.

Oregon Foreclosures Jump 30% Over Q4/2008

In spite of the ban, foreclosure filings for Oregon were up 30 percent in Q1/2009 over the last quarter of 2008, according to RealtyTrac. Oregon ranked 10th nationwide for foreclosure filings, far outpacing the national average foreclosure filings growth rate of 9% (Q1/2009 vs. Q4/2008).