Measures To Tackle Foreclosure Menace

With the foreclosure menace continuing unabated many measures are being taken at the federal, state and local levels to tackle the menace. Foreclosures have caused a general slump in the economy that has led to rise in unemployment.

Recently President Bush signed a law that will allow for extension of unemployment benefits through the stretch of Christmas holidays. Simultaneously the important lenders will put on hold foreclosures until New Year. By doing so Bush was trying to ease the pressure on the economy because of job losses. It will give seven weeks of extra relief to the unemployed – the total grace period running into 46 weeks. The new law will offer thirteen additional weeks of unemployment benefits for workers without jobs in those states where the rate of unemployment was unusually high. It will total up to 59 weeks of grace.

Mortgage giants like Fannie Mae and Freddie Mac said that they had sent notices to all their servicing agencies to put on hold all foreclosure proceedings from Thanksgiving Day till 9th January 2009. The statement read, “Freddie Mac servicers and foreclosure attorneys were told to contact as quickly as possible an estimated 6,000 borrowers with foreclosure sales scheduled between November 26, 2008 and January 9, 2009. If the property is occupied, the servicers and foreclosure attorneys will halt the sale.”Fannie Mae is optimistic that the step will benefit a minimum of 10,000 foreclosure victims. They will now be able to continue to stay in the houses that are their homes. This pause will give time to the lenders to negotiate new agreements with those borrowers who are not being able to be current on their mortgages.

Prior to this other banking and mortgage entities had declared that they too would be undertaking similar steps.

Earlier this month Citigtroup announced that it was imposing a moratorium on a majority of its foreclosures. Approximately it will benefit 500,000 of its clients at risk from foreclosures. The moratorium will give time for both parties to come to a more realistic, mutually beneficial understanding.

J.P. Morgan Chase said that it would speed up the modification of mortgage loans worth about 110 billion dollars. It will of assistance to 650,000 householders who will now get a fair chance to save their houses from foreclosure.

Bank of America declared during the first week of October that it would be modifying mortgages that will positively affect 400,000 householders who had taken loans from Countrywide Financial Corporation. The latter has recently been taken over by Bank of America.