New York (MainStreet) – Big mortgage companies are sure to make friends this holiday season by putting the freeze on foreclosures. Fannie Mae (Stock Quote: FNM) and Freddie Mac (Stock Quote: FRE) are leading the charge, saying they won’t evict any homeowners for the rest of the year.
If you read between the lines though, there’s more to this story. Yes, both of the government-owned lenders are freezing evictions for the holidays – but only from Dec. 20, 2010, to Jan. 3, 2011. And even in that time, both will continue to process the paperwork that leads to foreclosures.
So while both companies won’t be kicking people out of their homes in the literal sense this holiday season, they’ll still be foreclosing on homes.
The eviction freeze involves all single-family homes and two-to-four unit properties.
"If the property is occupied, our foreclosure attorneys will suspend the eviction to provide a greater measure of certainty to families during the holidays," said Anthony Renzi, executive vice president of single family portfolio management at Freddie Mac.
While Fannie Mae didn’t make a similar official statement, company spokesperson Janis Smith told The Hill that Fannie Mae will also stop evictions over the same period.
"Families will not be evicted from their homes during the holidays," she said.
Suspending evictions in the holiday season is actually getting to be a regular occurrence for both Fannie and Freddie. Both companies did so in 2008 and 2009, despite a growing portfolio of delinquent mortgages.
According to Fannie Mae’s records, the government-sponsored enterprise (GSE) now holds a 4.56% “serious delinquency rate” on its books, an amount totaling $798 billion as of Sept. 30, 2010.
Freddie Mac is in somewhat better shape. Its seriously delinquent rate is pegged at 3.82%, as of Oct. 2010.
It’s not just the government-sponsored enterprises that are freezing foreclosure evictions either. Wells Fargo (Stock Quote: WFC) has already announced that it will hold off on evictions over the same December 20-January 3 period, as has JP Morgan Chase (Stock Quote: JPM) which has already frozen foreclosures until its robo-signing foreclosure paperwork problems are worked out.
Bank of America (Stock Quote: BAC) is also on board. Rick Simon, Bank of America spokesperson, told CNN that it’s standard operating procedure for the bank to ease off on evictions in the heart of the holidays.
"Bank of America's practice in recent years [is to hold off on] foreclosure sales or evictions from late December through New Year's Day on loans held in our investment portfolio or that are owned by investors who give the bank delegated authority," he explained.
Whether you pass it off as good public relations or just a temporary “get-out-of-jail” free card for two weeks, at least homeowners won’t be tossed out in the cold this holiday season.
There’s something to be said for that.