Maybe. California and Federal leaders have been putting the pressure on Fannie Mae and Freddie Mac over their unwillingness to cut mortgage balances under the “Hardest Hit Fund,” or the bailout. Fannie and Freddie own more than 60% of the mortgages in California. The major hold-up in getting them to play ball was their mandate that they would not participate in any program that required them to make a financial contribution or match any assistance by FHA or government programs like Keep Your Home California, which gives out mortgage aid. As the following article discusses, that’s all about to change.
Starting this month, Keep Your Home California will no longer require banks or investors to match contributions in order for homeowners to get a principal reduction in their mortgages. But they will have to agree to cut the term or rate. This is good news considering Fannie and Freddie’s ownership of over half the mortgages in California. This government program has failed to pick up much momentum in the past with very few people reaping the benefit of a principal reduction. We can only hope that now that the Fannie and Freddie are on board, all the other non-participating banks will jump on board. California homeowners could use the help!