Fannie Mae and Freddie Mac Mortgage Plan Expected Tuesday on 100 Mortgages

Fannie Mae and Freddie Mac are at the centre of a US government plan to stabilize the ailing property market and modify mortgages stopping short of direct federal financial help for homeowners at risk.

Between Fannie Mae and Freddie Mac they back or own around 31 million mortgages that when altogether are work $5 trillion. The US government took over both banks in September due to debts mounting in their mortgage portfolios.

To be eligible for the plan you would need to live in the mortgages property, not filed for bankruptcy, own at least 90 percent of the home’s value and must be at least 90 days late in your mortgage payments.

The government would then adjust the loan onto a lower interest rate that could be lowered for 5 years and then put on to a prearranged level or you could be put on a longer loan agreement which could be to 40 years, with the main goal being to bring the monthly payment less than 38 percent of the monthly household income.

In the third quarter of 2008 Fannie Mae reported a loss of $29 billion, as well as sharp increases in loan defaults.

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