Fannie Mae Announces Initative to Assist Mortgage Borrowers
After testifying last week in a hearing before the U.S. House Committee on Financial Services, Fannie Mae Chief Executive Daniel H. Mudd has released a statement establishing a new company initiative nicknamed “HomeStay.”
Its goal? To assist bad credit home loan borrowers …
We’ve broken the plan into segments:
- The company works with lenders to help homeowners avoid immediate foreclosure. The company has an operation that focuses on helping people who are falling behind on payments to avoid mortgage loan default. If it is a Fannie mortgage, the company will work with lenders or services to offer a range of workout solutions along with offering lenders financial incentives to help borrowers avoid foreclosure.
Mudd stated that the corporation worked out 27,000 loan modifications last year and also has programs in place to help lenders identify vulnerable borrowers and methods to refer borrowers that are not on Fannie’s books to places they might receive help.
Fannie Mae is expanding lending options to assist lenders refinance homeowners out of high-reset ARMs or other loans that may be problematic. The HomeStay initiative “makes these products more flexible and broadly available and includes low down payments, long-term fixed rates, low fees and points, a prohibition of pre-payment penalties, and a ban on arbitration clauses.”
Credit requirements are being adjusted so that many homeowners facing payment shock will be able to mortgage refinance into Fannie supported loans without requiring they clear up unpaid bills on their credit reports. The company is also relying on its experience with blemished credit to expand the previous subprime product from 500 lenders to around 2,000 accredited lenders, while stretching maximum loan terms from 30 to 40 years.Mudd said the Fannie is currently getting at least 15,000 applications for subprime refinancing each month and that 80 percent of these mortgage applications have been accepted. Thus, approximately 1.5 million homeowners facing resetting ARMs could be eligible for Fannie Mae loan options.
- The company helping to counsel future homeowners, especially those who are most vulnerable, or for those whom a product modification alone will not save the day. The goal is to help people know what to do before payment shock hits, and to avoid making the wrong choice on their mortgages in the first place.
He cited $5 million in grants this year to support a national foreclosure prevention initiative being managed by NeighborWorks of America and the Homeownership Preservation Foundation. Such nonprofit organizations join with local governments, other nonprofit organizations, borrowers and home loan lenders to help families overcome obstacles that could result in the loss of their homes.
Mudd also cited additional educational programs such as a “Know Your Mortgage” effort, providing lenders with fact sheets with easy-to-understand descriptions of mortgage terms in English and Spanish for use with borrowers and an expanded distribution of its Home Counselor Online system to lenders, organizations and agencies.
This Web-based application is designed to help people understand the home-buying process, how to protect or fix their credit, what to demand and what to avoid.
“As we help the subprime market through this turmoil, Fannie Mae will continue to support better lending guidelines,” Mudd said. “When banking regulators finalize the new guidelines regarding teaser [adjustable-rate mortgages], which should be soon, we will work with our industry partners to comply with them. From the start, we said we believed the best course of action would be to follow the regulatory process to avoid further disruption of the subprime market and the borrowers who depend on it.
That’s what we’re going to do.”
April 26th, 2007 at 11:53 am
Please email me with some information on who I can contact to get some help to get my house out of foreclosure and refinance with someone who is willing to get me a chance. I have excellent credit when I bought my house but my mortgage company sold my house to another mortgage company and put me on an adjustable rate which has doubled my mortgage payment.
I look forward to your response.
Thank you,
Roxanne Crossland
April 26th, 2007 at 11:54 am
Please email me with some information on who I can contact to get some help to get my house out of foreclosure and refinance with someone who is willing to get me a chance. I have excellent credit when I bought my house but my mortgage company sold my house to another mortgage company and put me on an adjustable rate which has doubled my mortgage payment.
I look forward to your response.
Thank you,
Roxanne Crossland
May 6th, 2007 at 12:15 pm
hi, im intersested in getting a loan to build a average home or modular home on my 10 acres of land which is paid off , i have few issues w/ credit due to a auto accident in which i went thrugh 6 operations and lost 2 fingers, i also have a nice d.pmt and would use the land as collateral.. i work for the state t.pike and earn 43,000 w/out overtime is there programs u have to help me or know of any help .. my phone no is 570/5877630 please call me to discuss jeff
May 7th, 2007 at 12:15 pm
Please mail me some information on how to lower my house payment’s with a fixed rate mortgage. I would like to refinance. We had our house up for sale for about 8 months while we lived in Kansas, it did not sell. We were about 4 months behind when we decided to move back. Now our payment’s have jumped to 1,600.00 per month from 1020.00. We have been paying the amount requested for the last five months and were told we would not receive a monthly billing statement untill we paid the 1,600.00 for one year. Could we still refinance with another company while we are still paying this monthly house payment. We have been on time with our payments.
Thank you.
May 7th, 2007 at 9:21 pm
Please send information how I might take advantage of the recent overtures by Freddie Mac and Freddie Mae to help homeowners facing foreclosure. What are the qualifying requirements for such help.
Thanks
May 25th, 2007 at 11:53 pm
Can you please send me more information about this we need some help
Thank You
June 2nd, 2007 at 11:45 am
our house is 7 years old.we started out with chase mortgage then last year we started getting behind on some of our bills due to lack of work. my husband has been self employed for about 25 years.i listened to people WRONG THING TO DO.and they convinced me to consoldate my bills. the people that did all the legal work put us with washington mutual.we had enough money left over to pay the payment for a year.of course our payment went from 1300.00a month to 2070.00.they said because we payed everything off after 6 months our interest rate would go way down it is still 8.500%.we have found a washington mutual near us and have been there several times all they do is give us a list of numbers to call. i have been on the phone with hundreds of people since jan. that is when when we started having trouble.i ask them about my interest rate not going down in oct.of 2005 and they cant give me an answer but you are delinquent on your payments,well if getting my interest rate lowered it would have changed my payment and maybe we could have made it ….always no comment but i wasnt delinquent until jan and my payments were made before then we could probably swing 1200.00a month and when things pick up go back to our payments.all i asked for was at least 6 months. they wont take parcial payments.its not that we dont try they just wont take what we try to give them. we are two payments behind now it takes one whole month plus half of the next month to get the payment up.thank god we dont have small children because we have had to let our power go and our phone go until they cut them off. we have them back on for now.but all we study is getting the house payment and nothing else.my husband has literally gotten sick not being able to make the payments.we had our house on the market for 6 months and had a lot of interested people but the realistate guy was too high so we now have it in the market for sale by owner we are only asking what we owe on it and we will walk away with nothing.i am 45 and i dont want to start over with a foreclosure on my record or a bankruptcy. we have worked too hard…. i hope you can give someadvice i would greatly appreciate it…….patty
November 14th, 2007 at 10:34 am
I also, am one that has been faced with a mortgage payment that will go up, and I will not be able to afford this new payment. But now. I am being told from several lenders that I do not make enough money to refinance. PLEASE HELP!
CARMEN