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Tuesday, November 11, 2008

Fannie Mae, Freddie Mac and Feds to Speed Up Home Loan Modifications

FOXBusiness

In yet another effort to prevent more foreclosures, Fannie Mae (FNM), Freddie Mac (FRE) in conjunction with U.S. government officials, are speeding up the modification of home loans held by financial companies.

Sources told FOX Business Network that Fannie Mae, Freddie Mac and U.S. government officials will announce later Tuesday that they will hasten efforts to modify hundreds of thousands of loans that are past due. The goal is to bring the ratio of household debt to income for the borrowers down to 38%. U.S. government officials also plan to encourage large banks that hold loans to take similar steps.

The program will be an extension of HOPE NOW alliance, which was announced last year and is designed to prevent foreclosures by reworking the terms of mortgages.

The Treasury Department will make the announcement at a 2:00 p.m. press conference at the Federal Housing Finance Agency.

Financial industry sources told FOX Business Network that the White House rejected the FDIC’s proposal to prevent foreclosures for up to 3 million home owners. That more ambitious proposal would have provided some type of loan guaranteed for hundreds of billions of restructured mortgages.