Fannie, Freddie collapse could help borrowers

WASHINGTON (AP) -- A top government regulator says the takeover of mortgage finance companies Fannie Mae and Freddie Mac should provide an opportunity to modify more home loans for troubled borrowers.

FDIC chairman Sheila Bair says the takeover, announced earlier this month, will allow regulators to "take a look at the loans and see what can be modified."

She was speaking before a House committee.

Bair says with 1.5 million foreclosures last year and 1.2 million already in the first six months of this year, the foreclosure crisis is accelerating.

The FDIC is working to help refinance delinquent homeowners into 30-year mortgages with interest rates currently capped at 5.9 percent. The FDIC introduced the program about a month ago after it seized IndyMac Bank.

Some lawmakers want to see if something similar can be done with loans held by Fannie Mae and Freddie Mac.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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