According to a report from the Wall Street Journal, mortgage giants Fannie Mae and Freddie Mac announced yesterday that they will lower the principle balances on the mortgage loans of some homeowners after saying for years that they wouldn’t.
The report says that the Federal Housing Finance Agency approved a plan to reduce the principle balances on loans secured by the government-sponsored enterprises in a mass transaction that is the first of its kind since the housing bubble burst in 2007.
The Wall Street Journal reports than less than 50,000 mortgage loan holders will be eligible for the program, which is designed to benefit homeowners with mortgages that are deep underwater. The debt alleviation move is a conservative one, which isn’t a surprise considering that the leaders of the entities claimed it was something they would not be willing to do due to the financial structure of the companies.
The mortgage balance reduction program should launch within the next few weeks, according to the WSJ. It is assumed that homeowners who are eligible for a reduced principle balance will be notified by mail from their loan servicers.
HARP Refinancing Still Available to Eligible Homeowners
Homeowners who do not qualify for the Fannie and Freddie principle balance reduction program but who still owe more on their mortgages than their homes are currently worth (and who meet other underwater refinancing requirements) may still be eligible for the special HARP refinancing program, which is due to expire on December 31, 2016.
The HARP program, which is a type of mortgage refinance loan for homeowners who have mortgages that were originally owned or sold to Fannie Mae or Freddie Mac prior to May 31,2009, allows certain homeowners to refinance their homes and help to rid them of the excess balances owed on their mortgages. For more information on HARP refinancing, call an NLC Loans Personal Mortgage Advisor toll-free at 877-480-8050.