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Fannie, Freddie and some banks to briefly stop evictions for holidays

Fannie Mae and Freddie Mac combined own roughly half of all single-family homes across the country. The two companies announced that they will put a brief halt to evictions in foreclosure proceedings during the holidays this year. Fannie Mae will suspend evictions from December 19 through January 2, 2013, while Freddie Mac says it will suspend eviction beginning December 17.

The brief suspension of evictions apparently is intended to allow distressed homeowners facing foreclosure and eviction to remain in their homes for the holiday period. An executive with Fannie Mae says that, "We're taking this step in support of families who have faced financial challenges and gone through a foreclosure," according to the Cleveland Plain Dealer. The difficulty is, that when the suspension period ends January 2, 2013, the evictions will resume.

Many homeowners may not even know if Freddie or Fannie owns their mortgage. But at the same time, a number of banks in Ohio reportedly have decided to follow Freddie and Fannie's lead and put a temporary suspension on evictions during the holiday period, according to the Plain Dealer. But not all banks are necessarily on board.

Since the housing market collapse several years ago, there has been a great deal of information published about foreclosures, underwater mortgages, short sales, loan modifications and other processes that may be available. But when a homeowner falls into financial distress, sometimes it is difficult to know where to turn. A great deal of information seems to conflict with other information available in the marketplace.

It is important for distressed homeowners to learn as much as possible when financial troubles arise. Information is valuable for homeowners in helping to make informed decisions. Filing for bankruptcy is one option when facing foreclosure. A bankruptcy petition will put at least a temporary halt to a foreclosure proceeding.

In some cases, the bank may later resume the foreclosure. Some homeowners may wish to walk away from a home without fear of the bank pursuing a deficiency judgment after a foreclosure sale. In other cases, a homeowner may be able to use a bankruptcy proceeding to reorganize debt, such as in a chapter 13 bankruptcy, and retain the home.

One of the difficulties in seeking information from apparently conflicting reports is the idea that there is no one-size-fits-all process. Each household has different financial structures-different asset, income and debt structures. Ohio residents facing financial trouble may consider speaking with a Cincinnati bankruptcy lawyer for information about how the Bankruptcy Code may apply to an individual financial structure.

Source: Cleveland Plain Dealer, "Local banks, Fannie Mae and Freddie Mac delay foreclosure evictions during the holidays," Teresa Dixon Murray, Dec. 11, 2012

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