Feds use their New Financial Interest in Fannie & Freddie to accelerate mortgage help for homeowners

The new mortgage assistance plan was announced by the Federal Housing Finance Agency, which seized control of Fannie and Freddie in September 2008.

Officials say they hope the new approach, which takes effect Dec. 15, will become a model for loan servicing companies that collect mortgage payments and distribute them to investors. These companies have been roundly criticized for being slow to respond to a surge in defaults.

To qualify, borrowers would have to be at least three months behind on their home loans and would have to owe 90 percent or more than the home is worth. Investors who do not occupy their homes would be excluded, as would borrowers who have filed for bankruptcy.

Qualified borrowers could recieve help in several ways:

1. The interest rate would be reduced so that they would not pay more than 38 percent of their gross income on housing expenses.

2. Another option is for loans to be extended to 40 years from 30.

3. Some of the principal may be deferred, interest-free to make your payment fit within the 38% ratio.

The plan focuses on loans Fannie and Freddie own or guarantee and represent only 20 percent of delinquent loans.

Sheila Bair, chairman of the Federal Deposit Insurance Corp., said the plan "falls short of what is needed to achieve wide-scale modifications of distressed mortgages."

When the loan is chopped up into a million pieces and any investor can block a modification from happening, a program like this will only scratch the surface of the mortgage crisis," said Sen. Charles Schumer, D-N.Y.

Note:

If you are having difficulty making mortgage payments either because your income has changed and/or your loan payments have increased you may wish to consider seeking a loan modification with your lender. Because most mortgage debt is owned by multiple investors you may receive more attention using a law firm specializing in loan modifications. Please review these links for more informaton and ask me to refer you!

Loan Modification Explained

What makes obtaining loan modifications more difficult?

Favorable Conditions for a Successful Loan Modification

How to improve your odds of receiving a loan modification

Visit my website Today!

www.MortgageAdvisor.info & www.GregZaccagni.com