Released: April 19, 2007

Freddie Mac helps homeowners refinance subprime loans

Source: Dina ElBoghdady, Washington Post (Free Registration)

Freddie Mac, one of the nation’s largest mortgage investors, plans to buy about $20 billion worth of mortgages that would primarily refinance the loans of people in danger of losing their homes.

The McLean company is targeting the loans of subprime borrowers, who typically have blemished credit records or other factors that make them risky to lenders. Since the housing market softened, many such borrowers have missed payments and defaulted at record rates in parts of the country.

Freddie Mac’s announcement followed the unveiling earlier this week of a similar campaign by its larger rival Fannie Mae, which plans to allow lenders to qualify more subprime borrowers for refinancing.

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