Fannie Mae Suspending Foreclosures Through January 2009

Fannie Mae just announced that it will be suspending foreclosure sales through January 9, 2009 in order to focus on its streamlined modification program, which it announced on November 11. 

Here's an excerpt from the press release:

"The temporary suspension of foreclosures is designed to allow affected borrowers facing foreclosure to retain their homes while Fannie Mae works with mortgage servicers to implement the streamlined modification program scheduled to launch December 15. Foreclosure attorneys and loan servicers will be instructed to use the additional time to reach out to borrowers who have defaulted on their loans and continue to pursue workout options. The initiative applies to loans owned or securitized by Fannie Mae.

The streamlined modification program is aimed at the highest risk borrower who has missed three payments or more, owns and occupies the primary residence, and has not filed for bankruptcy.

Fannie Mae will be working with foreclosure attorneys and servicers to reach out to the more than 10,000 borrowers the company estimates would be affected during this period. Borrowers who have Fannie Mae loans that are scheduled for foreclosure between November 26, 2008 and January 9, 2009, will be contacted directly by the attorney handling the foreclosure. If the home is occupied, Fannie Mae has instructed servicers and attorneys to suspend the foreclosure."

This is good news for the most troubled of home owners with Fannie Mae loans. This is also good news for the future of the foreclosure real estate market should some of these folks work out their loans and avoid foreclosure because it will help diminish some of the future bank-owned/foreclosure real estate market inventory. Though how much of an effect it will truly have is yet to be seen.

Hat tip to RealEstateZebra.