Fannie Mae and Freddie Mac are just two of the government entities that have committed to helping subprime mortgage holders keep their home. Fannie Mae is developing a new effort called “HomeStay”, while Freddie is modifying its program called "HomePossible" that will give borrowers ways to get out from under adjustable-rate loans before interest rates reset at a higher level, making monthly payments unaffordable.

In addition, the Federal Reserve announced today that the federal financial regulatory agencies that oversee lenders encourage them to work with lenders to work out loan arrangements, rather than foreclose. Alternatives to foreclosure include converting the loan to a fixed-rate mortgage, and receiving credit counseling through the Center for Foreclosure Solutions. Banks that work with borrowers in low-income areas can also receive Community Reinvestment Act benefits.

Source: CNNMoney.com "Fannie, Freddie to offer subprime help"; Federal Reserve, ”Statement on Working with Mortgage Borrowers”,.

What It Means to You

Make sure you understand the terms of your mortgage. If you are faced with rising monthly payments, research the alternatives provided before allowing foreclosure to take away your home.

Where to Go for Help

• HUD Approved Housing Counseling Agencies
• Center for Foreclosure Solutions
• Protection for Military Service Members
• Freddie Mac HomePossible Program