New Government Program to Help Homeowners

The Federal Housing Finance Agency (FHFA) and the mortgage industry announced a new program this month to renegotiate home loans held by Fannie Mae and Freddie Mac. The plan, which will become effective December 15, 2008, will be available to borrowers who are at least three months behind on their mortgage and who owe 90 percent or more than the home’s current value. The program excludes borrowers in bankruptcy and investors who do not live in the homes. Under the plan, borrowers may obtain a reduced interest rate to allow them to pay no more than 38 percent of their income on housing. Other options include loan extensions to 40 years and interest-free deferral of a portion of the principal amount.

For more information, see the following Federal Housing Financing Agency link

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