Well, it appears Fannie Mae and Freddie Mac are putting on their Santa suits for thousands of homeowners. It was announced yesterday that the mortgage giants have suspended foreclosure proceedings for pre-foreclosed homes for the next 6 weeks. This will allow homeowners to stay in their homes through the holidays and give them extra time to figure out how to stay in their homes beyond the hiatus. This also allows Fannie Mae and Freddie Mac to work on modifying the terms of the loans for these homeowners. Fannie and Freddie have partnered with HOPE Now, a government-organized coalition of the largest U.S. mortgage servicing companies, to offer borrowers who are at least 90 days delinquent and have high loan-to-income ratios the chance to modify mortgage terms to cut their monthly mortgage payments.
I must admit I have some mixed feelings about this. First of all, I want to make sure everyone knows that I am happy for the homeowners that they will be able to celebrate the holidays in their own home and not scrambling to put a roof over their heads. I can't imagine going through the kind of stress these individuals have at this time and it's nice to see they will have a "time out" from the concern of losing their home during what should be the most special time of year. That being said, it does make me wonder how this all will play out. What if the Government continues to fumble the ball on this issue? How long will people be able to stay in their home without making a payment and how is that fair to the rest of us that pay out bills on time? I know of multiple families in my own neighborhood that have not made their house payment in over a year and ARE STILL IN THE HOUSE!! What's going to happen when (if) these homeowners are foreclosed? I know one thing that will happen...the house will be sold by the bank or at auction and the selling price will be well below what was the true market value. This will, in turn, hurt all the other homeowners in the neighborhood when they look to sell their home.
My long winded point is this...the longer all of this is strung out, the harder it will be for the housing industry to recover. Ideally, the Government, Fannie/Freddie, and the other big banks involved in this crisis will put one of their many ideas in motion that will enable the majority of these homeowners to stay in their home and get back on the right track. But continuing on at this pace will do nothing but slow down any hopes of turning the corner on this crisis.
Date: Friday, November, 21st 2008 @ 09:33:11 AMViews: 773
This blog entry currently has 5 comments posted.
J Boyer
I am in agreement with you. They can delay foreclosures but my bet is that 95%+ of those homes that are having foreclosure delayed will get foreclosed on later anyway. Just delays the inevitable.
Posted on 2008-11-25 09:03:41
Nicole
Great stuff. I have enjoyed reading the post, and very good news for all those who have not their own home. Now thy can enjoyed the Christmas at their own home. Thanks for the sharing.
Posted on 2008-12-10 12:21:00
Tim
I totally agree with the author of the post...Christmas has passed but i hope everyone enjoyed this occasion at their own homes.
Posted on 2008-12-25 23:56:35
james wheelock
This move was worthless. It will only make the losses deeper and gives very little to the nervous over strapped homeowner.
Posted on 2008-12-27 18:20:48
Jim
such a wonderful post .I am totally agree with your thoughts .Especially I like your thinking for the homeowners that they will be to celebrate their holidays in their own home.
Posted on 2008-11-22 01:55:25