The suspension in foreclosure properties announced by Fannie Mae and Freddie Mac last week received very positive feedback from the public.
Tiffany Edwards, a mother in Tampa, has been troubled by foreclosure until she heard about the suspension last week. At the moment, her husband is the only income earner in the family. She has just found a new job a few weeks ago, not in time for the scheduled foreclosure of their home. Thanks to the suspension, she and her husband can work out some plans so they can stay in their home for the time being.
This is the same scenario for the other sixteen thousand families in the country. They will be relieved of stress brought by foreclosure for the entire duration of the holidays.
Aside from the suspension, the two companies also offer a new loan modification program where mortgage payments would not exceed 38% (inclusive of taxes and insurance) of the pre-tax monthly income of a household.
Experts say, however, that while the measures might be helpful to some homeowners, its effects are not for the long run. The moratorium ends on January 9, 2009. After that date, families could be evicted all the same.
Also, the number of properties qualified for reprieve represents but a small part of the total number of homes to be lost to foreclosure.
The suspension covers only the loans under Fannie Mae and Freddie Mac which are only one-fifth of the total loans in the country. Furthermore, not the entire twenty percent satisfies the conditions for eligibility – the mortgaged home must be occupied by its owner, and delay in payments must be three months at the least.
Distressed homeowners might have been given a moment to breathe, but if the foreclosure crisis is to be fully addressed, long-term measures must be adapted.
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Written by Alex Rolim.
