Fannie Mae and Freddie Mac won't write down your loan balance

The Federal Government's pressure to get loan servicers and investors to reduce homeowners loan balances is getting heavier but the two biggest owners of mortgages are not listening.

Fannie Mae and Freddie Mac who are controlled by the Government are not in the business of lowering the principal balance on the loans they own. They may modify your loan and lower the interest rate though. The Obama Administration has said they would require loan servicers to "consider" lowering balances on troubled homeowners mortgages.

Essentially Fannie and Freddie would have to use tax dollars to supplement the losses of the write downs. Is this fair? Should we pay for this over and over? It seems we are in more ways than one.

Keep in mind if you have a Fannie mae or Freddie Mac owned mortgage and your loan to value is maxed out you may still be able to refinance. They are allowing first mortgage refinances up to 105% loan to value and if you have a second up to 125% loan to value. This of course is a temporary program.