On March 1, 2013, Fannie Mae and Freddie Mac implemented a new program that allows homeowners in risk of foreclosure to give up their homes and cancel their mortgages. The program specifically targets borrowers undergoing hardships such as illness, loss of employment, or family deaths. Those who are current or less than ninety days late on their payments can apply for these deed-in-lieu transactions under certain guidelines, which aim to avoid lengthy foreclosures and quickly release properties on the market.
Effectively, homeowners can stay in their properties for up to three months without paying rent or making mortgage payments. This program will certainly assist borrowers facing difficulties, as the eleven million homeowners’ properties across the nation are in risk of foreclosure. The question remains how this program will affect the state of the housing market and economy. It is too soon to tell yet whether the overall outcomes will be positive or negative; nevertheless, Fannie Mae and Freddie Mac’s new program will be impactful.
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This post was written by Gina Berg