Mortgage giants Fannie Mae and Freddie Mac announced last Thursday that they are extending the suspension of foreclosure sales and eviction from single-family homes till January 31.

Both companies had previously announced that foreclosures are suspended through the holidays till January 9.

The government-controlled home loan giants said the extension will let troubled borrowers to keep their homes while working with mortgage servicers in finding alternatives to foreclosure and implement the Streamlined Modification Program that went into operation on December 15, 2008.

Developed by Freddie Mac, Fannie Mae, the Federal Housing Finance Agency (FHFA), HOPE Now and 27 mortgage servicers, the Streamlined Modification Program was designed to expedite loan modifications for eligible borrowers. The program applies to borrowers who have missed three or more mortgage payments, own and occupy their homes, and have not filed for bankruptcy. The program is not entitled to vacant single-family homes.

Freddie and Fannie’s modification program aims to create more affordable mortgage payment schedule for at-risk of foreclosure borrowers. With the program, borrowers can reduce their interest rate, extend the life of the loan and/or defer payments on part of the principal.

For Fannie, the extended suspension on foreclosures will give them 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.  Fannie personnel have been reviewing seriously delinquent loans to determine if borrowers have been contacted and all options to work out their situations have been exhausted, the company said.

While for Freddie,  “Freddie Mac is committed to pursuing every responsible opportunity to reduce foreclosures and accelerate the return of stability to the U.S. housing market,” said Freddie Mac Chief Executive Officer David M. Moffett. “Today’s announcement will provide Freddie Mac and its servicers additional opportunities to help put more families on the path to stable homeownership.”

For more about Freddie Mac workout options, see http://www.freddiemac.com/corporate/buyown/english/avoiding_foreclosure/.