Mortgage giants Fannie Mae and Freddie Mac will suspend foreclosure sales and evictions on certain properties until after the holiday season, as they prepare to implement a previously announced loan-modification program.

The temporary foreclosure suspension announced Thursday applies to 10,000 borrowers with Fannie-owned mortgages and 6,000 with Freddie-owned mortgages in occupied single-family and two- to four-unit properties with foreclosure sales scheduled between Nov. 26 and Jan. 9. Fannie and Freddie, which are under government control, last week said they would begin to modify the loan terms on potentially hundreds of thousands of mortgages that are at least 90 days past due.

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The voluntary plan would enable certain borrowers to receive more affordable loans that would make their mortgage payments at most 38% of their monthly income. Although Fannie and Freddie hold a relatively small percentage of all the troubled mortgages, government officials hope their moves will be adapted by other mortgage holders, lenders and mortgage-servicing companies.

Freddie is trying to find buyers for a rapidly growing number of foreclosed homes, totaling 28,089 at the end of the latest quarter, up from 11,916 a year earlier. Fannie is also struggling to sell foreclosed homes as their prices drop. Its inventory of single-family foreclosed homes on Sept. 30 was 67,519, up from 54,173 three months earlier and 33,729 at the end of 2007.

—Lauren Pollock contributed to this article.

Write to Aparajita Saha-Bubna at Aparajita.Saha-Bubna@dowjones.com

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