In a move to give the government's rescue plan time to work, mortgage giants - Fannie Mae and Freddie Mac - have announced a suspension of all foreclosure and eviction proceedings between November 26 2008 and January 9, 2009.

The companies said the hiatus on foreclosures will give mortgage servicers more to work out easier borrowing terms for troubled homeowners. Freddie Mac CEO, David M. Moffett, said in a statement that by delaying the foreclosure sales, the servicers will have the opportunity to work with more borrowers who could qualify for a modification under the Streamlined Modification Program, set to launch December 15.

Freddie servicers have been directed to immediately contact the 6,000 borrowers who already have auction sales or evictions scheduled for between the specified dates, to tell them about the postponement of the sales. According to Fannie estimates, nearly 10,000 of its borrowers will be affected - implying those who are facing foreclosure over the next two months.

The move by the two government-sponsored enterprises comes a week after their regulator unveiled a plan that could cut payments for hundreds of thousands of borrowers by easing terms on their loans. Homeowners facing foreclosure, who are spending more than 38 percent of their income on mortgage payments, could have payments reduced by the companies, under the program.

Herb Allison, Fannie Mae's chief executive officer, opines: "We felt it was in the best interest of both borrowers and Fannie Mae to take this extra step to ensure that homeowners with the desire and ability to prevent a foreclosure have an opportunity to stay in their homes."