Fannie and Freddie instruct agents to restart foreclosures sales
11/29/2010
By Credit.com Staff
The two government-backed mortgage insurers lifted their moratoriums on foreclosed property sales late last week following a review of the homes affected by the questionable practices of lenders known as robosigning, according to a report in the Wall Street Journal. However, it is not yet clear when these transactions can actually begin again as many loan servicers still need to finish reviewing proper paperwork.
"Our decision was motivated by several factors including the protection of buyers with title insurance, the negative impact lingering foreclosed properties has on neighborhoods and the cost burden that is placed on taxpayers when [bank-owned] sales are suspended," a Fannie Mae spokeswoman told the newspaper.
The two mortgage giants owned nearly 240,000 properties at the end of September, and difficulty selling the homes could lead to higher costs, the report said.
Many consumers who used to purchase foreclosed homes in an attempt to flip them for a profit are now staying away from these properties over fears that their previous owners could successfully fight the seizures.
