Select Mortgage Lenders Vow to Halt Evictions During Holidays

By: CBS News
By: CBS News

(CBS News) Fannie Mae and Freddie Mac, along with one of the nation's biggest lenders, said Monday that they will suspend some foreclosures during the holidays.

From December 19 through Jan. 2, 2013, Fannie will halt evictions of homeowners in a single-family property and in apartments with up to four units that are financed by a mortgage from the government-sponsored enterprise. Freddie, the nation's other main provider of government-backed housing loans, will stop foreclosures for the same the type of homes from December 17 through Jan. 2, 2013.

JPMorgan Chase also is temporarily ceasing foreclosures. The banking giant said in a statement that it would suspend all evictions beginning December 19 through Jan. 1.

"We're taking this step in support of families who have faced financial challenges and gone through a foreclosure," said Terry Edwards, an executive vice president in Fannie Mae's credit management division, in a statement. "The holidays are a chance to be with loved ones and we want to relieve some stress at this time of year."

Edwards said borrowers who are struggling with their house payments should contact Fannie as soon as possible.

Although the news is likely to bring a measure of relief to homeowners at imminent risk of eviction, the respite will be brief. Freddie noted that firms that handle evictions for the company will continue filing foreclosure documents, such as default notices, so evictions can resume after January 2 of next year.

Fannie and Freddie, which finance the housing market by purchasing mortgages from lenders, are government-owned. They were seized by federal authorities in 2008 after the agencies suffered massive financial losses stemming from the housing crash.

Following superstorm Sandy, both agencies said that they would suspend evictions and foreclosures in affected areas for 90 days. For borrowers with a Fannie loan, that foreclosure moratorium will last through Feb. 1, 2013, while for Freddie customers the suspension lasts through next February.

The Federal Housing Administration in November also halted foreclosures on federally insured homes in storm-hit areas of Connecticut, New Jersey, New York and Rhode Island.

Foreclosure activity has fallen in recent months. According to real estate research firm CoreLogic, 58,000 foreclosures were completed in October, down 17 percent from the year-ago period.

Still, foreclosures remain elevated. Between 2000 and 2006, when the bubble in housing prices started to deflate, an average of roughly 21,000 foreclosures were completed each year. Roughly 1.3 million homes, or 3.2 percent of all properties with a mortgage, were in some process of foreclosure as of October, down from 1.5 million in the same period last year, according to the firm.

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