Fannie Mae, Freddie Mac to Unveil Bad Credit Mortgage Assistance Plans

Reuters - The chief executives of mortgage finance companies Fannie Mae and Freddie Mac are expected to unveil plans today to help bad credit mortgage loan borrowers, the Wall Street Journal reported on its website.

Fannie Mae Chief Executive Daniel Mudd and Freddie Mac’s Richard Syron are due to testify before the U.S. House of Representatives Financial Services Committee on Tuesday. Subprime lenders extend mortgages to people with weak credit.

Mudd plans to tell the panel that Fannie Mae is expanding its products to let subprime borrowers refinance home loans out of some adjustable-rate products, the Journal reported, citing prepared congressional testimony.

He also plans to say that Fannie Mae is adjusting its credit report requirements to allow more borrowers to qualify for the option, the Journal reported.

Fannie Mae will also purchase 40-year loans on the secondary market, the Journal said, citing Mudd’s testimony.

Freddie Mac’s Syron plans to tell the panel that his company is developing 30- and 40-year bad credit home loans with reduced margins and longer fixed-rate periods, the paper said. We’ll update this story as developments take place.