Subprime Meltdown: Fannie, Freddie To The Rescue

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The Wall Street Journal (subscription required) reports in Tuesday’s editions that Fannie Mae and Freddie Mac will soon unveil new mortgage products intended to help homeowners with subprime loans avoid foreclosure. Report says Fannie Mae will soon begin purchasing 40-year mortgages, a major endorsement for a financing option that is rarely used.

The Journal reports, ‘Fannie Mae Chief Executive Daniel Mudd is expected to tell the House Financial Services Committee that Fannie Mae is adjusting its credit requirements so that more borrowers would qualify for this option.

More from the same report: ‘Freddie Mac Chairman and Chief Executive Richard Syron plans to tell the House panel that his company is developing 30- and 40-year subprime loans with reduced margins and longer fixed-rate periods. These loans are expected to be in the market in the summer.’