Fannie Mae and Freddie Mac have a new bail out program, but it by no means will empty the bilge, and in fact, is deemed a weak effort by its critics.

The problem:  The plan can only assist Fannie Mae and Freddie Mac approved loans.

“Freddie Mac and Fanny Mae are the dominant players in the U.S. mortgage market, but represent only 20 percent of delinquent loans.” says the NY Times.  Further, officials said the plan ”falls short of what is needed to achieve wide-scale modifications of distressed mortgages.”

If your loan was one of the chosen that were approved by Fannie or Freddie, and if it meets the criteria below, you could be eligible for mortgage interest assistance such as:

• bringing your payments down to 38% of your total income.
• a part of the total money borrowed could be deferred, with no interest.
• a 30 year term could be extended to 40 years.

The criteria for eligibility:

• your loan is 90 days or more delinquent, and
• your mortgage is greater than 90% of the value of your house.
• you must live in the house.
• you can not have applied for bankruptcy.

Proponents of the plan say that it was not meant to be far reaching.  Instead, it was meant as a model for other financial institutions to follow.

I say, The banks have been getting financial relief.  Let’s hope that the homeowners are starting to get some of the same treatment.

The program begins December 15th.

Related Reading:

The Complete Idiot's Guide to Success as a Mortgage Broker

Mortgage Ripoffs and Money Savers: An Industry Insider Explains How to Save Thousands on Your Mortgage or Re-Finance

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