A heads up for brokers out there looking to facilitate the cramdown of loans: on January 8, 2009 Fannie Mae and Freddie Mac extended the moratorium on foreclosures until the end of January a factor which will delay cramdown efforts.

In addition to homeowners, renters currently living in properties in foreclosure will be helped. Fannie Mae has instituted a Real Estate Owned (REO) Rental Policy which allows renters to stay in their homes provided they have leases and are current on their rent payments.

The number of homeowners (and by extension, renters) who have taken advantage of this moratorium to extend their occupancy is not known.

Keep in mind that after the foreclosure sale, the tenant is entitled to a 60-day notice to vacate, in addition to the 20 to 30 days needed to actually evict them if they do not vacate.

There is also a 30-day notice and contacts to be made with the owner before a foreclosure can be commenced by recording an notice of default.

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