Maryland Foreclosure Homes – Can Freddie and Frannie Help?

Freddie Mac and Fannie Mae, home loan guarantors sponsored by the government of the United States of America, are doubling their efforts to help home owners prevent foreclosures.

Freddie Mac has announced that in states having relatively fast processes to foreclosure properties, servicers will be given up to 300 days from the last payment’s due date to look at alternative options to avoid foreclosures. Besides foreclosure homes in Maryland being included in the list, the following states are also included in this policy : Alabama, Alaska, Arizona, Arkansas, California, Georgia, Hawaii, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, North Carolina, Rhode Island, Tennessee, Texas, Virginia, West Virginia, Washington D.C. and Wyoming.

In a number of cases though, these policies would only postpone the foreclosure proceedings, providing benefits to servicers lessening their fiscal strains only temporarily.

Both these home loan guarantors said that fees provided to loan servicers will be increased when they would work with borrowers to avoid foreclosures.

As part of the new provisions made by Freddie Mac and Fannie Mae, for working with homeowners avoid foreclosure through loan modification servicers would be paid $800 as compared to $400 in the past. If, during a short sale, a servicer would agree that the house be sold for less than the remainder of the mortgage amount, $2,200 would be paid as compared to $1,100 previously paid.
Servicers in Maryland have also been provided with more time by Freddie Mac to work with owners of foreclosure homes in Maryland.

Last year, policies were adopted by both that delayed the need for losses to be recognized on some loans which were delinquent. On securities on back mortgages being held by someone else, Freddie and Fannie have guaranteed payment. If the borrower would default on making his loan payment, the investors will be compensated by Freddie and Fannie. Freddie’s policy in the past was to buy problem mortgages soon after they were overdue by 120 days. Now, they could wait till the loan became overdue for 24 months. For owners of Maryland foreclosure homes, this is good news.

Related Posts:

• Maryland Foreclosure Homes Sales on a High
• Relief for Virginia Residents
• Call for Obama to Speed up Sales of Forclosure Houses
• Government Initiatives to curb Maryland Foreclosures
• Fannie, Freddie: Roles in Containing Repossessed Houses