Fannie Mae and Freddie Mace are launching its most radical program ever December 15 th, in an effort to save hundreds of thousands of delinquent homeowners from foreclosure. The program will allow delinquent homeowners to renegotiate their loans facing foreclosure through an accelerated process.
Fannie Mae and Freddie Mac own or guarantee nearly 31 million U.S. mortgages or 6 out of every 10 mortgages in the country. But of that number, officials are not sure exactly how many homeowners facing foreclosure will qualify for the program. To qualify, borrowers facing foreclosure must be at least 3 months behind on their mortgage payments and must owe at least 90% or what the home is currently worth.
The program is only designed for borrowers who actually live in the home as their primary residence. Investors and landlords would not qualify under this program.
The renegotiated loans will offer two solutions for delinquent homeowners facing foreclosure:
- a reduced interest rate so that borrowers would not pay more than 38% of their income on housing expenses and
- an extended 40 year mortgage with some of the principal deferred without interest.
It is about time that the mortgage companies step-up the pace in their efforts to stop foreclosures . The foreclosure process is so fast that many homeowners don't have time to save their homes through these special programs that are often slow with tons of red tape. Hopefully, this new program will make a difference for thousands of homeowners slated for foreclosure.