Foreclosure suspensions extended through Jan.

/ Source: The Associated Press

Mortgage giants Fannie Mae and Freddie Mac said Thursday they will extend the suspension of foreclosure sales and evictions from single-family homes through the end of January.

The companies had suspended foreclosures through the holidays, but were expected to resume proceedings after Jan. 9.

The government-controlled home loan giants said the extension will allow borrowers facing foreclosure to keep their homes as it works with mortgage servicers to find options for troubled mortgage holders under the Streamlined Modification Program.

Freddie and Fannie began the modification program in December, aiming to create more affordable mortgage payments for borrowers at risk of foreclosure. The program applies to borrowers who have missed three payments or more, own and occupy their homes, and have not filed for bankruptcy.

Under the program, borrowers can reduce their interest rate, extend the life of the loan or defer payments on part of the principal.

The extended hiatus on foreclosures will give Fannie more time to launch a new policy that will allow renters in company-owned foreclosed properties to stay in their homes, Fannie said in a news release. Details of the new policy have not been announced.

Fannie personnel have been reviewing seriously delinquent loans to see if borrowers have been contacted and all options to work out their situations have been exhausted, the company said.

Freddie Mac Chief Executive David Moffett said in a statement the mortgage giant is "committed to pursuing every responsible opportunity to reduce foreclosures and accelerate the return of stability to the U.S. housing market."

Fannie and Freddie own or guarantee about half of the $11.5 trillion in U.S. outstanding home loan debt. The government seized control of the sibling companies in September.