Financial and political pressure are motivating lender to try to avoid foreclosures, lenders are taking action on several fronts:
- Fannie Mae, America's leading mortgage lender, is planning to assist as many as 1.5 million "subprime" borrowers refinance out of high-interest loans.
- Freddie Mac, (a government-backed corporation just like Fannie Mae), is creating products for buyers with poor credit. Freddie Mac doesn't make loans directly, but pledges to buy as much as $20 billion worth of these mortgages from participating lenders.
- Nonprofit organizations are working with finance companies for at-risk borrowers.
- In addition to efforts by specific companies, the Mortgage Bankers Association announced a foreclosure-prevention campaign in partnership with the nonprofit group NeighborWorks America. They will link homeowners to a free counseling hot line (888-995-HOPE) provided by the Homeownership Preservation Foundation, boost the capacity for homeownership counseling within NeighborWorks and conduct a national ad campaign for homeowners in financial distress.
Michael Lozar
Bellingham Loan Consultant
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