Foreclosure Relief Begins

Today the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac, the nation’s largest mortgage finance companies, will begin accelerated loan modifications to lower payments for struggling homeowners in an effort to reduce foreclosure rates.

Now under a government conservatorship, Fannie and Freddie will target homeowners who are currently 90 days delinquent who have high debt-to-income and loan-to-value ratios.  The reduction in payment may come in the form of an interest rate reduction, a deferral of interest, an extended loan amortization period (i.e. 40 year term), or a reduction in principal.

Undoubtedly the question of fairness will rise with those who have been paying their mortgage on time.  However, with the amount foreclosures nationally continuing to grow throughout 2009, this might be much needed aid.

Further information will be available as details are released.