Holiday Eviction Bans Versus Foreclosure Moratoriums
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In the past few days there have been a flurry of lender announcements promising that this holiday season there will be an eviction ban for 2009. Nobody says so, but the eviction suspension differs greatly from the foreclosure moratorium offered in 2008.
Let’s see: Fannie Mae has announced that it will suspend all foreclosure evictions from December 19, 2009 through January 3, 2010. Ditto for Freddie Mac and a number of private lenders.
However, let us return the world of yesteryear.
In November 2008 Fannie Mae announced that it had “issued a notice to its loan servicing organizations and retained foreclosure attorneys directing them to suspend foreclosure sales on occupied single-family properties as well as the completion of evictions from occupied single-family properties scheduled to occur from November 26, 2008 until January 9, 2009.”
Freddie Mac said in 2008 that “it has ordered its national network of mortgage servicers and foreclosure attorneys to suspend all foreclosure sales and evictions involving occupied single family and 2-4 unit properties with Freddie Mac-owned mortgages between November 26, 2008 and January 9, 2009.”
Distinctions
Notice something different between 2008 and 2009?
First, it’s enormously difficult to get people evicted at year end. Northern courts and sheriffs, in particular, seem to magically close down, delay or stall evictions which would leave families on the street in cold weather. Besides, you’re not going to get a lot of evictions on Christmas Eve, Christmas, New Year’s Eve, New Year’s Day or on weekends regardless of where a property is located.
Second, in 2008 the foreclosure moratorium lasted about six weeks. In 2009 the eviction ban is about three weeks.
Third, and most important, to me an eviction suspension does not mean foreclosures will stop. It means that lenders can continue foreclosing but they will wait a little bit before removing owners from their homes.
A Real Moratorium
Lender’s can — if they elect — offer a real foreclosure moratorium. For instance, M&I Marshall & Ilsley Bank is the largest bank in Wisconsin, an institution with 192 offices throughout the state. The bank has a foreclosure moratorium which extends through March 31, 2010 and is available for “all owner-occupied residential loans for customers who agree to work in good faith to reach a successful repayment agreement.”
The company says that its “Homeowner Assistance Program also features streamlined assistance programs for potentially distressed homeowners who are identified in advance and proactively offered assistance. It also offers a foreclosure abatement program that features several refinancing options, including term extensions and reduced rates that can be used, as necessary and applicable, to reduce monthly payments.”
Profits Up
Meanwhile, New York State Comptroller Thomas P. DiNapoli has just announced that “Wall Street profits totaled $50 billion through the first nine months of 2009, more than twice the annual record.”
I’m not clear as to whether such profits have been calculated before the payment of bonuses, or after.
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