Freddie Mac Cuts Down Government Foreclosures
Freddie Mac has suspended government foreclosures for mortgage loans qualified for any of the housing schemes offered under Obama’s program, the HOPE NOW program and other federal loan modification programs.
Freddie Mac showed its commitment to help ensure the success of President Obama’s Home Affordable program by suspending government foreclosures on defaulting loans that qualify for one of the government’s housing initiatives.
With the previous suspension of government foreclosures already expired last March 6, Freddie Mac again reached out to distressed homeowners by ordering its counselors and servicers to find a scheme for these borrowers out of the available workout initiatives before putting their loans to foreclosure folders. These include Freddie Mac’s refinancing schemes, the Federal Housing Finance Agency’s Streamlined Modification Program, Fannie Mae’s refinancing schemes and the HOPE NOW Alliance scheme.
Ingrid Beckles, default asset management executive at Freddie Mac, said Freddie Mac has ordered its servicers and counselors not to proceed with government foreclosures unless they have contacted the homeowner and the homeowner did not show interest or did not have the financial capacity to participate in any of the loan modification or refinancing schemes.
Additionally, Freddie Mac has also launched a new modification strategy that targets high risk loans. It will hire third party servicers to focus on borrowers who took alternative mortgage loans and other highly risky mortgage loans. It has also prepared counselors and specialists trained to help borrowers with high risk loans and to handle the expected high volume of callers.
Meanwhile, Faith Schwartz, executive director of HOPE NOW, reported that HOPE NOW has modified 123,000 in January, an increase of 4 percent from repayment and modification plans in December 2008. HOPE NOW is an alliance of private-sector mortgage servicers, investors and nonprofits aimed at reducing lender and government foreclosures. Schwartz also reported that HOPE NOW processed 125,000 loan payment plans in January.
As the foreclosure prevention programs are being implemented, lender and government foreclosures continued to increase as shown in the February foreclosure data collected by RealtyTrac and foreclosures.com. According to RealtyTrac, there were 290,631 foreclosure filings in February. These include notices of default, bank repossessions and auction sale notices. During the month, one house in every 440 housing units nationwide was given a foreclosure notice.
Foreclosures.com’s data showed that lender and government foreclosures in February increased by over 67 percent from January data. Alexis McGee, head of foreclosures.com, said that if nothing is done on a national scale, lender and government foreclosures will reach 1.2 million housing units by the end of 2009.
By Cassiano Travareli