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Fannie Mae and Freddie Mac Loans

Home mortgage loans can be divided into two types – conventional and government insured loans.  Government insured loans are guaranteed by the federal government and include FHA (Federal Housing Administration), VA (Department of Veterans Affairs) and  RHS (Rural Housing Service)/USDA(United States Department of Agriculture) loans. 

Conventional loans are loans made by a private institution without a guarantee or insurance from a government agency and include Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) loans. 

Fannie and Freddie don't make loans.  Rather, they buy mortgages from banks and other lenders, package them as bonds, guarantee them against default and sell them to investors.  Together, Fannie and Freddie own or guarantee about half of U.S. mortgages.  If you don't have a government insured loan, chances are your loan is owned by Fannie Mae or Freddie Mac.
  


How To Tell If You Have A Fannie Mae Or A Freddie Mac Loan

Fannie and Freddie are known as “Government Sponsored Entities” (“GSEs”).  Although Fannie or Freddie may own your loan, most borrowers have no direct contact with these GSEs because the loans are serviced by another mortgage bank (often the same bank that gave you the loan to begin with).

Your mortgage servicer will be able to tell you if Fannie or Freddie owns your loan.  But you can also check yourself by using a secure online look-up tool.  To quickly find if Freddie Mac owns your loan, click here.  To see if Fannie Mae owns your loan, click here. 


I Missed A Mortgage Payment. 
What Are My Options With A Fannie Mae Or A Freddie Mac Loan
?

Both Fannie Mae and Freddie Mac have their program eligibility criteria that your lender will apply when evaluating your request for assistance.  This analysis is far too detailed and complicated to discuss here, but generally the available options are similar to standard workout options such as a repayment plan, a forebearance agreement, a loan modification and refinancing.  However, Fannie Mae and Freddie Mac have their own version of the Home Affordable Modification Program (HAMP), which is designed to reduce your payments to no more than 31% of your gross monthly income, and the Home Affordable Refinance Program (HARP).  Both Fannie and Freddie also have “in house” programs that allow you to reduce your payments even further under some circumstances.

Fannie Mae and Freddie Mac loans are governed by different rules which give you additional options not available to borrowers with other types of loans.  In some circumstances, you have the option of meeting with your lender face-to-face to resolve the delinquency.  The meeting is a time for you to review your mortgage paperwork with a bank representative and determine whether there are any options to resolve the delinquency and allow you to stay in your home. 

It is very important to open and read your mail.  If your lender offers to meet with you, you should accept that opportunity.  In fact, if you haven’t heard from your lender, request a face-to-face meeting yourself.  The sooner you meet with your lender to resolve the problem, the easier it will be to fix.  There is an embarrassment factor for the homeowner who is behind on the mortgage, but don't let that prevent you from meeting with the bank.  Bank personnel deal with this problem all the time and there are special programs specifically for homeowners in this situation.  The bank usually looses money if it has to foreclose, so fixing the problem is in everyone's best interest.


The available programs and options to help a homeowner avoid foreclosure are handled by the bank's loss mitigation department.  It is called "loss mitigation" because their job is to minimize the loss to the bank by preventing the house from going into foreclosure.  Below are some of the Fannie and Freddie specific programs to help homeowners who have delinquent mortgages.



HARP:  The Home Affordable Refinance Program (HARP) is unique — it’s the only refinance program that enables borrowers with little to no equity in their homes to take advantage of low interest rates and other refinancing benefits.  HARP ends December 31, 2015.  The major HARP eligibility criteria are:

 
  • Good Payment History:  To qualify, you must have a good payment history for the past 12 months.  This means having no late payments in the last 6 months and no more than one 30-day late payment from 6 to 12 months ago.

  • Does Not Have To Be Your Primary Residence:  Your home can be your primary residence, 2nd home or investment property.

  • Limited Equity:  You have limited equity or your first mortgage exceeds the current market value of the home (i.e., your loan-to-value ratio must be > 80% to be eligible).

  • Loan Owned By Fannie or Freddie:  Your loan is owned or guaranteed by Fannie Mae or Freddie Mac.  To quickly find if Fannie Mae owns your loan, click the Fannie Mae Loan Lookup Tool.  To see if Freddie Mac owns your loan, click the Freddie Mac Loan Lookup Tool.

  • Your Loan Was Bought Before May 31, 2009:  Your loan was acquired by Fannie Mae or Freddie Mac on or before May 31, 2009.  This date can be found in the Loan Lookup results.


HAMP:  The Home Affordable Modification Program (HAMP) is for homeowners who do not qualify for HARP.  It is designed specifically to help homeowners impacted by financial hardship.  With HAMP, your loan is modified to make your monthly mortgage payment no more than 31% of your gross (pre-tax) monthly income.  If eligible, the modification permanently changes the original terms of your mortgage.  The major HAMP eligibility criteria are:

 
  • Cannot Refinance:  You are ineligible to refinance your current mortgage.

  • Long-Term Hardship:  You are facing a long-term hardship.

  • Missed Payments:  You are behind on your mortgage payments or likely to fall behind soon.

  • Loan Owned By Fannie or Freddie:  Your loan is owned or guaranteed by Fannie Mae or Freddie Mac.  To quickly find if Fannie Mae owns your loan, click the Fannie Mae Loan Lookup Tool.  To see if Freddie Mac owns your loan, click the Freddie Mac Loan Lookup Tool.

  • You Signed Your Loan Papers Before January 1, 2009:  Your loan was originated on or before January 1, 2009 (i.e., the date you closed your loan.)


Remember as with any mortgage loan, your first step should be to contact your lender and a local HUD certified housing counselor.  But if your lender is not working with you properly to resolve the problem with your Fannie Mae or Freddie Mac loan, you should report the matter to Fannie or Freddie directly.

In-Person and Telephone Support For Borrowers

Fannie Mae offers in-person and telephone support for borrowers through its Mortgage Help Centers.  If your loan is owned by Fannie Mae, you can meet in-person or by phone with an experienced housing advisor to discuss your mortgage situation.  English and Spanish advisors are available, and all services offered by the Fannie Mae Mortgage Help Center are at no cost.

          Fannie Mae Mortgage Help Center

          1-800-7FANNIE
          1-800-732-6643

           Email Fannie Mae through a contact-us form.


Freddie Mac offers in-person and telephone support for borrowers through its Borrower Help Centers.  If your loan is owned by Freddie Mac, you can meet in-person or by phone with an experienced housing advisor to discuss your mortgage situation.  English and Spanish advisors are available, and all services offered by the Freddie Mac Borrower Help Center are at no cost.

          Freddie Mac Borrower Help Center

          1-800-FREDDIE 
          1-800-373-3343

          Email Freddie Mac through a contact-us form.

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This website provides general legal information and not legal advice.  The law is complex and changes frequently. 
Before you apply any general legal information to a particular situation, consult an attorney. 
If you cannot afford an attorney call 1-866-Law-Ohio (1-866-529-6446) or visit OhioLegalServices.org for your closest legal aid office.

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