Here's an underreported story worth following.
A ban on foreclosure sales and evictions from houses owned by mortgage giants Fannie Mae and Freddie Mac, which began as a high-profile effort just before the holidays to keep people in their homes as the government tried to come up with homeowner rescue plans, is over.
Fannie Mae said in a brief statement that “Fannie Mae’s suspension of foreclosure-related evictions concludes as of March 31, 2009. The company has in place special foreclosure sale requirements that take into account the Making Home Affordable program. A foreclosure sale may not occur on any Fannie Mae loan until the loan servicer verifies that the borrower is ineligible for a Home Affordable Modification and all other foreclosure prevention alternatives have been exhausted.”
I cited over the weekend that inventory is down throughout Southern California, while sales activity is up. In other words, more buyers competing for fewer available homes.
The Fannie / Freddie moratorium made this problem worse by disrupting the supply of new inventory. It may take a few weeks to play out, but it's possible we may get a late spring / early summer surge of new foreclosures. We'll continue to watch these developments closely.
