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UNDERWATER HOMEOWNERS Could Benefit From Fannie Mae's New Program!

Happy Mother's Day, all you Ma's!

We hope the day is bright and sunny where you are today. Here, in Chicago, it's raining like crazy, and kind of chilly!

Within the next couple of month's, national loan funder Fannie Mae will introduce a program to help those "underwater" in their home mortgage loans - in other words, they owe more on their mortgage than their home is presently worth.

Under another foreclosure prevention measure proposed by the FHA and currently being considered by the U.S. House, borrowers could re-finance their loans only after their original lender has written down the loan's principal.

Fannie Mae's program would simply refinace the loans current balance, without reduction, into a longer, fixed loan term, with a more-attractive interest rate, in many cases.

The program would be limited to those who have kept their house payments current, and whose loans are currently Fannie Mae-Guaranteed, of course. But it could help many, since those with underwater loans, by definition, do not normally have the collateral to re-finance them.

Mortgage loans would be re-financed for up to 120% of the home's market value. Original estimates of 150,000 qualifying homeowners have been advanced by Fannie Mae.

Lenders, the National Association of Realtors, and the National Association of Home Builders support the new prgram. Competitor Freddie Mac has yet to develop anything similar for mortgage loans it guarantees.

Our post today at BlogChicagoHomes.com contains more information, as well as a link to James R. Hagerty's story in yesterday's Wall Street Journal.

DEAN & DEAN'S TEAM CHICAGO

Posted by Dean Moss - Dean's Team Chicago Real Estate Team on 05/11/2008 11:12 AM

Comments (2)

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2 Comments on UNDERWATER HOMEOWNERS Could Benefit From Fannie Mae's New Program!

You know, your home is your home. Yes it is an investment. But folks should be refied off the terrible sub prime rates. Other than that I do not think any one, me included should get a bailout

05/11/2008 11:51 AM

by Charlie Ragonesi Big Canoe homes, Jasper ,Ball Ground,Benttree,Dahlonega (All Mountain Realty)

We are still dealing with thousands of home that were actually underwater and unlivable. The lenders did not want them so they were very good at giving people the time they needed as it was in their best interest. Maybe thaat is why the subprime issue does not seem to be a big deal. We were alos lucky that in a poor city as New Orleans the subprime lenders saw much greener pastures elsewhere. The green was out west.

05/11/2008 08:18 PM

by Eric Bouler (Prudential Gardner)

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