DOW JONES NEWSWIRES
Mortgage-finance giant Freddie Mac (FRE) will begin using
third-party servicers that specialize in servicing Alt-A and other
types of higher-risk mortgages to advise homeowners in its latest
effort to help keep at-risk borrowers in their homes.
The move comes on top of Freddie and larger rival Fannie Mae's
(FNM) extension last week of their freeze on evictions - this time
through the end of February - to give loan servicers more time to
help financially strapped borrowers avoid foreclosure.
The mortgage giants were brought under government control in
September in efforts to bolster the ailing mortgage market, which
has been battered by souring home loans and falling residential
real-estate prices.
Freddie and Fannie buy mortgages from the lenders that originate
the loans. They package the loans into securities and sell many of
those securities to other investors.
Under the latest new program, a portfolio of higher-risk
mortgages that are at least 60 days delinquent will be given to a
specialty servicer to look for ways to help avoid foreclosure.
The program will initially target about 5,000
reduced-documentation loans from California, Nevada and other
states with high delinquent rates. Freddie, which said Alt-A loans
- those between prime and subprime - account for half of its
seriously delinquent mortgages, plans to review the results from
the pilot program in June before deciding whether to expand it to
other areas.
Last week, Freddie also announced a new program to grant
month-to-month leases to certain former owner-occupants and tenants
of foreclosed properties. There are currently 8,600 foreclosures in
Freddie's pipeline.
-By Lauren Pollock, Dow Jones Newswires; 201-938-5964;
lauren.pollock@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front
page of today's most important business and market news, analysis
and commentary. You can use this link on the day this article is
published and the following day.