Fannie Mae, Freddie Mac and several large mortgage lenders have announced that they will not foreclose on delinquent borrowers during the Christmas season. The mortgage servicers said they are taking this step to help struggling homeowners rest assured that they won’t have to think about facing a stressful foreclosure for at least a few more weeks.
Foreclosure Moratorium Applied to Delinquent Mortgage Loans
Homeowners who currently carry loans serviced through Fannie Mae and Freddie Mac will have a break from the worry of being evicted from their homes–at least for a few weeks.
Terry Edwards, an executive vice president for Fannie Mae, explained that “No family should have to give up their home during this holiday season.” To ensure no homeowners are removed from their homes, the mortgage giants plan to halt the eviction procedures by instating a foreclosure moratorium from Dec. 19 to Jan. 2.
Some banks that offer mortgage loans also said they will stop the eviction process during a similar timeframe. Both Chase Mortgage and Wells Fargo said they will not evict anyone between Dec. 22 and Jan. 2.
Bank of America said it would “avoid foreclosure sales or displacement of homeowners or tenants around the Thanksgiving and Christmas holidays.”
Fannie Mae and Others Continue Legal and Administrative Evictions Proceedings
While lenders plan to halt evictions for a few weeks, most said they will continue some aspect of the process during this period. Fannie Mae explained that legal and administrative proceedings for evictions will likely continue, but families will still be allowed to remain in their homes.
Wells Fargo also said it will not shut down its eviction machinery entirely. It will observe the foreclosure moratorium on foreclosed properties in its own portfolio, but said “foreclosure-related actions may still occur” for loans it services for other lenders.
Despite ongoing proceedings, the stop on evictions is expected to impact tens of thousands of homeowners, since the average number of scheduled foreclosures with evictions to follow is around 89,000 in one month, according to RealtyTrac.
The halt could particularly help homeowners who, during the moratorium, are able to come up with money to get current on their mortgage.