Several U.S. Senate Banking Committee members have urged failed government enterprises Fannie Mae and Freddie Mac to put the freeze on foreclosures, according to a letter obtained by Bloomberg.
In the letter sent to the two companies and their new regulator, the Federal Housing Finance Agency, Senators Charles Schumer and Robert Menendez, along with other panel Democrats, argue that such action would provide immediate relief to struggling homeowners while easing losses at the mortgage giants.
They are asking that the pair freeze foreclosures on non-performing loans in their portfolios for at least 90 days, similar to other moratoriums initiated in recent months by states and cities across the nation.
Additionally, the group is asking that Fannie and Freddie ease guidelines on loan modifications to give more homeowners a chance of turning things around.
But the question remains whether these moratoriums and repayment plans are actually solving the problem or simply prolonging the mortgage crisis.
Fannie Mae and Freddie Mac hold or guarantee nearly half of the $12 trillion U.S. residential mortgage market, so some thought before implementation is important here.