Fannie and Freddie to Boost Incentives for Helpful Lenders

Washington Post (08/01/08) P. D3; Merle, Renae
Fannie Mae and Freddie Mac are increasing the financial incentives they provide to lenders as a way to encourage them to work with struggling homeowners--a move that also would help curtail the industry's losses. The mortgage finance giants are doubling the amount paid to lenders for arranging a repayment plan that allows a homeowner to make up missed payments, increasing payments for loan modifications and also upping the incentives for allowing "short sales." Fannie Mae and Freddie Mac are recognizing the rising cost of the mortgage servicing industry's efforts to help keep borrowers from losing their homes, according to Vicki Vidal, an associate vice president at the Mortgage Bankers Association. "They want to provide the servicers the financial support to continue to conduct the loss-mitigation efforts," she says.