Fannie And Freddie Foreclosure Freeze To End

American Banker is reporting that the number of home foreclosures could soon “explode” as a moratorium that Fannie Mae and Freddie Mac put on foreclosure sales and evictions in late November is scheduled to expire.

At the time of the November 2008 moratorium Freddie Mac had somewhere between 5,000 to 6,000 loans scheduled for foreclosure, and Fannie Mae reported having more than 10,000 loans heading for foreclosure.

Additional factors expected to increase the number of foreclosures include:

• An increase in the number of option adjustable-rate mortgages that will require borrowers to begin to make fully amortized payments, rather than their previous minimum payments that did not cover interest; and,
• Rising unemployment.

American Banker does point out that this forecast of a major increase in foreclosures assumes no government intervention such as the current efforts to let bankruptcy judges rewrite mortgage terms to help people keep their homes.

Related posts:

1. Fannie Mae And Freddie Mac Suspend Foreclosures
2. Origins of the Fannie Mae/Freddie Mac Crisis
3. Fannie and Freddie Can’t Afford To Bail Out Subprime