Homeowners facing foreclosure just received an early Christmas present: They won't be evicted from their homes over the holidays.

Underwater homeowners, as of two days ago and some others starting today, got an early Christmas present this year as two of the largest mortgage servicers, Fannie Mae and Freddie Mac, decided to pause with evictions and auctions of homes in foreclosure during the holiday season. From the third week of December, the repossession process will be temporarily suspended until the start of the new year. 

During the holiday reprieve, no homeowners will be evicted. However, the moratorium will not halt pre- and post-foreclosure business, such as a filing defaults and scheduling auctions.

“We’re taking this step in support of families who have faced financial challenges and gone through a foreclosure,” said Fannie Mae spokesperson Terry Edwards in a statement. The holidays are a chance to be with loved ones and we want to relieve some stress at this time of year.”

Fannie and Freddie are the largest providers of government-backed loans, and suspensions to the eviction process will help struggling owners of single-family homes and two- and four-unit properties.

Fannie and Freddie aren’t the only mortgage servicers affected by the holiday spirit. JPMorgan Chase and Citigroup released statements recently notifying their customers that there would be a brief holiday on evictions in December and January. Like Fannie and Freddie, JPMorgan and Citigroup both suffered massive losses during the housing crash of 2008. Birmingham-based bank Regions is also continuing the holiday tradition, putting a freeze on foreclosure evictions.

Foreclosure relief is also available to homeowners affected by Superstorm Sandy through February. In the area that was hit by the storm – designated as a natural disaster area – close to 125,000 homes were in some stage of the foreclosure process. Foreclosure activities on those homes, including eviction and auction sales, will be postponed until February at least.

Homes in foreclosure are still impeding the nascent housing recovery. Though the rate of foreclosures has dropped 17 points from this time last year, there are still roughly 1.3 million underwater or foreclosed homes weighing down the market value. According to RealtyTrac, approximately one in every 700 homes received a filing for foreclosure in October. While national foreclosure rates have dropped in the past year, the rate in states affected by Sandy, especially New Jersey, New York, and Connecticut, has drastically increased. In New Jersey, foreclosure activity climbed 140 percent, New York’s jumped 123 percent, and Connecticut experienced an increase of 41 percent.

Even though the pause on foreclosures will lengthen the process for homeowners, banks are eager to relieve stress during the upcoming holiday season. The pause is also an opportunity for homeowners who have not yet received a foreclosure notice to discuss different loan arrangements to pay down debt.

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