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[bob ford <bobford79 AT yahoo.com>]

This was just a live news conference.  TPTB are essentially seetting up 
parameters where people will be able to keep their homes , homes which they 
can not currently afford.  Measures include forgiving part of the principle, 
and re-negotiating more favorable terms.

  If you have been diligant in receving a common senese mortgage on a 
realistically priced home for your income; and, you have kept up your 
payments, this will be of no help to you.  Your money insteat will go to 
prop-up those who bought more than they could possibly afford.

Unintended consequences again.  TPTB are trying their darndest to control 
prices (home values).  Price control never works .  They are also rewarding 
bad behavior; we all know how promising that can be...........bobford


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By DAMIAN PALETTAArticle

 more in Politics »WASHINGTON -- Fannie Mae, Freddie Mac and U.S. officials 
announced plans Tuesday to speed up the modification of hundreds of thousands 
of loans held by the housing finance giants, marking the latest effort to try 
and prevent more foreclosures.

The announcement marks the government's most assertive use of Fannie Mae and 
Freddie Mac to help homeowners since the companies were taken over in 
September.

"We are experiencing a necessary correction, and the sooner we work through 
it, the sooner housing can again contribute to our economic growth," Interim 
Assistant Treasury Secretary for Financial Stability Neel Kashkarisaid.

At the Meeting
-Neel Kashkari, Interim assistant Treasury Secretary

-James B. Lockhart, FHFA director, oversight board chairman

-Brian Montgomery, FHA commissioner

-Faith Schwartz, HOPE NOW

-Michael Heid, Wells Fargo

streamlined effort will target certain loans that are 90 days or more past 
due. The program will aim to bring the ratio of mortgage payments for these 
homeowners to 38% of their income by modifying interest rates and in some 
cases forgiving portions of principal debt.

Borrowers would have to provide a statement or affidavit showing that they 
have encountered some sort of hardship that has impacted their ability to pay 
their mortgage. It would only apply to loans made on or before Jan. 1, 2008, 
and borrowers will be disqualified if they file for bankruptcy. The homes 
must be owner-occupied and escrows for real estate taxes and insurance must 
already be set up.

U.S. government officials plan to encourage big banks that hold loans in 
their portfolios to take similar streamlined modification measures.

The announcement came at a press conference at the Federal Housing Finance 
Agency, which temporarily has Fannie Mae and Freddie Mac in conservatorship 
because of their shaky financial condition.

Spokespeople for the companies, the Treasury Department and the Federal 
Housing Finance Agency weren't immediately available for comment.

Servicers are expected to be paid $800 for a successful modification and loan 
investors are expected to reimburse servicers for certain fees associated 
with the modification. There will be a 90-day trial period, and if borrowers 
successfully make payments for those 90 days the modification will be 
formally approved.

The program is expected to be an extension of the Hope Now alliance announced 
last year that aimed to help people avert foreclosure by reworking the terms 
of their mortgages. Several large banks, including Bank of America Corp., 
Citigroup Inc., and J.P. Morgan Chase & Co., have announced their own 
foreclosure prevention plans. Some bankers have complained that Fannie Mae 
and Freddie Mac weren't being flexible enough in discussions over loan 
modifications.

The administration is still discussing a range of other, more extensive 
options to help homeowners.

Write to Damian Paletta at damian.paletta AT wsj.com 

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