Refinance Your Way Out of Trouble
Editor's note: As a special feature for April, TheStreet.com offers a 20-part series on virtually everything about real estate. Today's installment is part 11.
Homeowners with high-risk mortgages are about to get some more options to help them keep their houses. Fannie Mae (FNM) and Freddie Mac (FRE) are coming out with new products designed to make it easier to avoid foreclosure by refinancing subprime loans.
Fannie and Freddie don't lend money; they are chartered by Congress to buy mortgages from lenders, freeing them up to make more loans. The mortgages are then repackaged into mortgage-backed securities and sold to investors.
Right now, both housing agencies primarily purchase so-called conventional mortgages, which are loans to borrowers with good credit. By committing to purchase subprime loans with relatively friendly terms, they are providing a potential lifeline to troubled borrowers.Fannie is adjusting its credit requirements for some existing products aimed at subprime borrowers so that more people will qualify for this option once the changes take effect later this year. It also plans to broaden the number of lenders offering the products to 2,000 from 500. "Our message to lenders with borrowers facing resetting
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