Happy Holidays: The US government is taking a two-week break from foreclosing on homes


American homeowners who have fallen behind on their mortgage payments will get a small break from the government this holiday season: They won’t be evicted until after the new year.  What a treat- Fannie Mae and Freddie Mac will temporarily cease stealing homes they don’t own for two short weeks.

The Federal National Mortgage Association, better known as Fannie Mae, which is operated by the federal government, said it will not evict homeowners between Dec. 19, 2016, and Jan. 2, 2017, though legal proceedings may continue. Fannie Mae declined to say how many families the hiatus would affect.

Since the housing crisis began in 2007, the US government has stood behind the mortgage market, rushing in as banks rushed out. In 2008, it nationalized the two largest holders of mortgage loans, Fannie Mae and the Federal Home Loan Mortgage Corporation (Freddie Mac). Fannie and Freddie guarantee and securitize loans made by financial institutions to subsidize 30-year fixed rate mortgages, while the Government National Mortgage Association (Ginnie Mae) guarantees loans made by US agencies like the Veterans Housing Administration.

All told, today the US government stands behind $7 trillion in mortgages, a little less than half the country’s total outstanding mortgage loans. But that number, which includes loans dating back decades, actually under-represents the government’s role in new mortgage origination. In the first three quarters of 2016, government financial institutions backed $189 billion in mortgage loans, versus $149 billion for the private sector. And that’s an improvement—between the end of 2007 and the beginning of 2014, the private mortgage market didn’t show any net increase in home lending at all.

That’s why Fannie’s decision to halt evictions is likely to affect a large share of the US population currently in danger of foreclosure. Things have allegedly improved since 2007—according to the real estate firm Corelogic, the foreclosure rate in 2016 is just 2.6%, the lowest since before the crisis—but there are still a lot of Americans in trouble. There were 36,000 foreclosures this year through September, and the number of homes in foreclosure proceedings stands at 340,000 (down from 493,000 in 2015).  Foreclosure filings are on the rise despite what the mainstream media is reporting.

While Fannie’s holiday gesture may seem superficial, it is designed to attract attention to the enterprise’s attempts to modify loans that are in trouble.

“If you are in trouble or facing foreclosure, reach out to Fannie Mae or your servicer today to get help,” Joy Cianci, a Fannie Mae executive, said in a statement. “Options are available to avoid foreclosure, and we want to help pursue those options whenever possible.”

Convincing financial institutions and borrowers that they and the public at large will be better off if troubled loans are restructured rather than sent into default has been a challenge since the housing crisis began.

The artificially rebounding housing markets promise to define Trump’s term in office as well. His pick for Treasury secretary has spoken of taking on the challenge of returning Fannie Mae and Freddie Mac to private hands. Done successfully, it would be a welcome development. After all, few are happy with taxpayers on the hook for such a large chunk of private debt that could implode if the housing market bubble continues to develop.

Thanks Freddie Clause- for absolutely nothing.

9 Responses

  1. Fannie/Freddie charge off – and sell collection rights individually or in bulk. They don’t know what happens after their charge-off. Can an attorney help Brenda? I am not an attorney. I have a finance background. So they don’t show up — What should Brenda do?

  2. Fannie recorded ownership of my home in land records after foreclosures sale. So, I filed an adversary complaint along with my BK Chp 13 to get Fannie to prove they are my creditor. Fannie never showed up. The clerk of court entered a default entry (judgment?). I think I’m suppose to file something to ask the Judge for a final default judgment. However, I don’t know what to do next because my attorney stopped responding/talking. SMH.

  3. Geez — nice of Freddie/Fannie – only Freddie/ Fannie sells off the collection rights. Who is anybody kidding? “Lets keep those derivatives rolling” – that’s what they do!!!! .

  4. I liked ALL the replies on this Neil. Thanks again for ALL you have done and continue to do in helping property owners with this huge racketeering scam. More states need to step up like Montana did in the “Morrow Case” and the big surprise in Colorado in the 10th Circuit Court Ruling- but like I said before, my experience with attorneys like Steve B is that they will do just like Rhonda Scott said and I have experienced that first hand. They totally ignore you, even though you have all the undisputed evidence, and push for a quick settlement involving a lot of attorney fees but pennies for all the people totally harmed whose property has been stolen under wrongful foreclosures. What can you expect anyway when you are fighting our very own corrupt racketeering government- little wonder they were quick to take over Fannie and Freddie, take the billions in profits by taking them over, and now push to push them out entirely while they rake in all the cash of us tax payers- what another giant scam.

  5. This article really lifted my spirits. Cheers Neil. Good point on the class actions on wrongful foreclosures and racketeering charges . The lawyer look for settlements for themselves so they don’t have to do the leg work to complete the prosecution and seek proper compensation for homeowners. We need foreclosure reforms or this problem is going to get bigger. To say it’s already out of hand is a gross understatement. HAMP modifications need to be taken over and removed from bank authority. Just like healthcare needs to be removed from insurance companies. Screwing people over for profit is the new economy for billionaires

  6. Reblogged this on Deadly Clear.

  7. Fannie and fred the biggest govt facade going. Quasi privately owned by the TBTF banks. They use f and f to hide behind while they do theft of YOUR property. If you have a document of any kind( note, pOA, mtg) that has either name on there, you can bet 100% that document is a fabricated fake.

  8. Good, informative article but good luck with reaching out to Fannie or Freddie (now the GSE) as they are just as inept and totally dysfunctional as nasty, phony so called “servicers” like Bank of America, Seterus, Urban Lending, and all the other co-conspirators who are ALL in on this huge racketeering scam.

    At least some people recognized this in the latest 10th Circuit Court Ruling in Colorado in George et al. vrs. Urban and nasty old B of A, but I think the only ones who will make out are the attorneys involved with the alleged “class action suit” which many experts say you should opt out of, if you were ever added to begin with, as you will only get pennies on the dollar while the attorneys make a killing and over look many unknowing and helpless property owners.

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