New Fannie Mae Program to help underwater borrowers

This program is for borrowers who owe more on the mortgage loan than its underlying security (the home) is presently worth.

Under this program existing lenders will not be required to write-down mortgage loans to such a level where refinancing would be feasible. Instead Fannie Mae will refinance new mortgages which would be adequate to cover the existing mortgage debt & refinance will be up to 120% LTV.

This program will cover mortgages which are paid to date & Fannie Mae insures or owns them.

For borrowers this may result in reduced payment due to reduced rate of interest, slightly extended amortization period or a fixed interest rate and it has been estimated that 150,000 homeowners will get help from this program.