House Owners Warned that Although Foreclosure Pace has Slowed Down

House owners warned that although foreclosure pace has slowed down it will not remain so for long. Both the government sponsored mortgage giants Fannie Mae and Freddie Mac have suspended foreclosures during the holiday season from 20th December till 3rd January.

From the latter part of August and during the early weeks of October there had been thousands of foreclosures during six weeks, with the banks refusing to accommodate short sales or modification.

The borrowers were not given time to avail of the HAFA (Home Affordable Foreclosure Alternative) plan that been newly crafted to allow the victims get out of foreclosure by opting for short sale or Deed in lieu instead of foreclosure. Millions were denied the chance; instead they were served with foreclosure auction dates.

Then the nation had heated up to another twist in the foreclosure crisis – the disclosures about robot-signings in October. From then on the pace has slowed down but it is apprehended that after the holiday season it will again pick up in earnest. Those who are underwater with their loans being greater than the value of their property should be more alert immediately and take up a proactive stand without a moment’s delay.

They should seek either modification or opt for short sale or deed in lieu of foreclosure. There are many borrowers who are resting on their heels thinking that the banks will continue to be as passive as they have been now – neither foreclosing nor evicting. Those good old days are no longer there.

Recently Terrance Edwards of Fannie Mae (Executive vice-president) said that his firm is making use of a "single track" method in the matter of loss mitigation. This means they are no longer instructing the servicers to act on their behalf in following up foreclosure if the borrower is trying to work out a modification of the loan.

He said correctly, "The fact that borrowers who pursue loan modifications, sooner rather than later, are more likely to succeed". This also applies to the matter of short sales. Realtors say that it is more convenient to work on short sale when a foreclosure date has not been scheduled.

Short sale is less stressful. One of the best agencies in this line is McGeough Lamacchia. It has wide contacts with the banks and 85% of their applications for short sales have won with approval.