Fannie Mae and Freddie Mac Promise no Holiday Foreclosures
Amidst the foreclosure scandal that has slowed the progress of many foreclosure proceedings over the last several months, Fannie Mae (FNMA) and Freddie Mac (FMCC), the two government-run mortgage companies, have promised to halt foreclosures over the Holidays.
Some of the country’s big banks are also feeling the spirit of the holiday season, Chase and Wells Fargo, two companies who have steered clear of the fiasco surrounding the foreclosure paperwork scandal, have also vowed to halt their foreclosure process over the final two weeks of the year.
In nothing more than a superficial gesture, Bank of America has vowed to do the same. Bank of America, however, has been under a government mandate to freeze foreclosure proceedings while government agencies sort through their mess of foreclosure paperwork.
In October it was discovered that BoA and JP Morgan had been skirting procedures for filing foreclosure paperwork in order to move the process along more quickly. This resulted in possibly thousands of homeowners being evicted from their residences prematurely. Surely the halt in foreclosures has caused the banks to lose millions of dollars, but since October the Federal Reserve Bank, the Office of the Comptroller of the Currency, and attorney generals from every state have been working together to determine if disciplinary measures are warranted.
The problem has recently been compounded by
mortgage backed securities. The process of grouping mortgages together, then splitting them up into shares and selling them off to investors has made it difficult to determine who legally owns these mortgage loans.
The temporary reprieve is surely an early Christmas present for tens of thousands of borrowers currently in loan default of their
mortgage. Homeowners in
California and Florida can breathe a temporary sigh of relief and enjoy their holidays free of stress.