As the landscape has so drastically changed as a result of the foreclosure crisis, efforts have been proposed and attempted to get homeowners back on their feet. Reducing the rate of home foreclosure and improving the housing market has become a political focus for legislators and government officials, including the President of the United States.
The entities Freddie Mac and Fannie Mae likely ring a bell to most Americans, as the lending process associated with them has gotten lots of political limelight. President Obama supports the idea of specifically addressing struggling homeowners who are at risk of losing the homes that they secured loans for through government-funded options. His support, however, wasn’t enough to solidify change.
Yesterday, the director of the Federal Housing Finance Agency announced his controversial decision that the principal balances of Freddie Mac and Fannie Mae loan balances cannot be reduced for homeowners looking for loan modifications to stay in their homes. His reasoning is that too many borrowers would try to take advantage of that opportunity.
The decision disappoints some, including the Obama administration, who believe that allowing this specific type of loan modification would be a win-win situation. By lowering the principal balances and, therefore, a homeowner’s monthly payment, the homeowner would get to stay in their home while paying at least some of the loan back.
This doesn’t necessarily mean that foreclosure prevention is a hopeless cause for those who secured loans through Fannie Mae or Freddie Mac. Working with a foreclosure attorney in one’s area can help clarify what, if any, options are out there to try to stay in one’s home.
Visit our website to learn more about possibly modifying your loan as a way to stay in your home.
Source: NPR, “Fannie, Freddie Regulator Holds Firm Against Mortgage Write-Downs,” Chris Arnold and Avie Schneider, July 31, 2012