- 2012elections - 9/11 Special Coverage - aca - africanamericanalzheimers - aids - Alabama News Network - american - Awards & Expo - bees - bilingual - border - californiaeducation - Caribbean - cir - citizenship - climatechange - collgeinmiami - community - democrats - ecotourism - Elders - Election 2012 - elections2012 - escuelas - Ethnic Media in the News - Ethnicities - Events - Eye on Egypt - Fellowships - food - Foreclosures - Growing Up Poor in the Bay Area - Health Care Reform - healthyhungerfreekids - howtodie - humiliating - immigrants - Inside the Shadow Economy - kimjongun - Latin America - Law & Justice - Living - Media - memphismediaroundtable - Multimedia - NAM en Espaol - Politics & Governance - Religion - Richmond Pulse - Science & Technology - Sports - The Movement to Expand Health Care Access - Video - Voter Suppression - War & Conflict - 攔截盤查政策 - Top Stories - Immigration - Health - Economy - Education - Environment - Ethnic Media Headlines - International Affairs - NAM en Español - Occupy Protests - Youth Culture - Collaborative Reporting

Fannie, Freddie Launch Latest Homeowner Lifeline

Black Voice News, News Report, BVN Staff Posted: Nov 13, 2008

Critics say plan is too little, too late for Inland Empire's foreclosure alley

The government and the mortgage industry have joined hands to launch the most sweeping effort yet to help troubled homeowners. Mortgage giant Fannie Mae and Freddie Mac announced plans to speed up the process for renegotiating hundreds of thousands of delinquent loans currently held by the Federal Housing Finance Agency (FHFA).

The FHFA seized control of the two mortgage finance companies in September.

The agency announced the plan Tuesday along with officials from the Treasury Department, Wells Fargo, the Department of Housing and Urban Development and Hope Now, an alliance of mortgage companies organized by the Bush administration last year.

To qualify, borrowers would have to be at least three months behind on their home loans, and would need to have home loans worth at least 90% their houses value. The interest rate or principal amount of the loan would be reduced so that borrowers would not pay more than 38% of their income on housing expenses.

Another option is for loans to be extended from 30 years to 40 years, and for some of the principal amount owed to be deferred interest-free. But theres a catch. The plan focuses only on loans Fannie and Freddie own or guarantee. They are the dominant players in the U.S. mortgage market but represent only 20 percent of the delinquent loans.

The approach, which goes into effect Dec. 15., will be standard for the industry to quickly move homeowners into long term sustainable mortgages, said Treasury spokeswoman Neel Kashkari.

Critics were quick to pile on the plan calling the initiative too little too late for places like foreclosure alley, the Inland Empire. Sheila Bair, chairman of the Federal Deposit Insurance Corp., said the plan falls short of what is needed to achieve wide scale modifications of distressed mortgages.

For the last few years the Inland Empire in Riverside County has been one of the fastest growing counties in the state home to a major housing boom. But now the I.E. is pretty much the poster child for the foreclosure crisis with more than 50,000 foreclosures in the region in 2007.

In newer developments, house after house sits vacant either up for sale by a bank or going for whats called a short sale which is when the owner owes more than the house is worth.

With the government spending billions to aid distressed banks, We must also devote some of that money to fixing the front-end problem: too many unaffordable homes, Bair said.

Citigroup said Monday it is halting foreclosures for borrowers who live in their own homes, have decent incomes and stand a good chance of making lowered mortgage payments. JP Morgan Chase & Co. last month expanded its mortgage modification program to an estimated $70 billion in loans, which could aid as many as 400,000 customers.

Starting December 1, Bank of America Corp. plans to modify an estimated 400,000 loans held by newly acquired Countrywide Financial Corp as part of an $8.4 billion legal settlement reached with 11 states in early October.

Related Articles:

When Big Capitalists Plead for Welfare

Conservatives Blame People of Color for Wall Street Meltdown

Democrats' Hands Arent Clean in the Financial Mess

Page 1 of 1




Just Posted

NAM Coverage