On Monday, November 10, 2008, Fannie Mae and Freddie Mac announced they are going to work with
homeowners that are in default of their mortgages. Where TARP and Hope For Homeowners have sorely disappointed to date, Fannie and Freddie are taking a real first step at trying to address the number of foreclosures. Fannie and Freddie will be modifying loans by temporarily or permanently reducing the
interest rate and / or extending the loan, and deferring a portion of principle interest free to bring the debt to income ratio to 38%.

The homeowner must meet the following criteria to qualify:
1) The loan must be owned by Fannie Mae or Freddie Mac
2) It must be the borrower's primary residence. (They must still live in the property)
3) The loan to value must be greater than 90%
4) The homeowner must be at least 3 months behind on their mortgage loan
5) The borrower has NOT filed for bankruptcy
6) The borrower must have income reliable and verifiable income

Citigroup has issued a moratorium on foreclosures for owner occupied properties where borrowers have verifiable incomes who have a good chance at making the lower payments. Unlike Hope for Homeowners, which is voluntary for lenders, but typically requires a write down in exchange of a shared appreciation
mortgage, the Fannie and Freddie plan simply adjusts the rate and the repayment term, but does not force a write down.

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