Fannie Mae and Freddie Mac to provide mortgage aid and foreclosure help.

This mortgage assistance plan is very important because Fannie Mae and Freddie Mac guarantee or own over 30 million U.S. mortgages, which is about 60 percent of all single-family mortgages. By many  estimates, this new government plan could help over 300,000 families that are currently delinquent on their mortgages or facing the mortgage foreclosure process.

To qualify for help, mortgage borrowers would need to be at least three months behind on their home payments, and they would need to owe 90 percent or more than the home is currently worth. Investors who do not live in their homes would not be eligible for aid, as would borrowers who have filed for bankruptcy.

Borrowers could receive help in several ways. They include:

• The interest rate on their current mortgage would be reduced so that borrowers would not need to pay more than 38 percent of their gross monthly income on housing expenses or towards mortgage debt.
• Another option is for the mortgage loans to be extended from 30 years to 40 years, and for some of the principal due to be deferred interest-free.
• If the borrower has no other option but to foreclose, Fannie and Freddie may rent the home to the borrower. More.

To be considered for assistance from this program, a borrower should contact his or her mortgage servicer and provide the requested information, including income information. Loan servicers also will have flexibility in the mix of tools to help a borrower, but the goal of the program is to create a more affordable payment.

The program goes into effect Dec. 15. Mortgage counselors should also be able to provide more information on this program.