Mortgage industry titans Fannie Mae and Freddie Mac, which have been under government control as of September 2008, will allow select borrowers who are in financial distress to remain in their homes as renters rather than lose them to foreclosure.

Fannie Mae was the first to make the move early last month. And according to a recent article in Business Week, the finance company has already “stopped about 20,000 foreclosure sales and halted 6,300 evictions of owners or renters this winter.”

Those are some staggering statistics for such a short time frame. But welcome news nonetheless for those who were able to take advantage of the assistance.

In addition to keeping people in there homes, the goal of the plan is to ensure that properties don’t fall into “disrepair.” The surge of defaults has had an unsightly impact on neighborhoods throughout the nation, knocking down home values and, in some cases, inviting trouble.

Here is a snip from Freddie Mac Chief Executive David Moffett:

“Keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market.”

Fannie Mae and Freddie Mac “own or guarantee about half of the $10.6 trillion in outstanding U.S. home loan debt,” which certainly makes this latest news a step in the right direction. Finding and creating ways to keep people in their homes is a good thing on so many different levels.

… is literally upside down, including everything inside it.

This is some rather clever construction; however it is certainly not the most practical home ever built.

In fact, according to an article from Reuters, the inverted residence is unsurprisingly more for spectacle than it is comfortable living.

Those who have visited the home have reportedly felt “dizzy and disorientated,” which is perhaps how countless homeowners here in the United States likely feel who are currently upside down on their mortgages.

Indeed, the current downturn in the real estate market has affected numerous borrowers nationwide who now owe the lenders more than their homes are actually worth.

The good news is that banks today are more willing to renegotiate loans for those who are in this type of situation to avoid tacking more foreclosures onto their books.

So if you can’t ride out this economic storm contact your lender sooner rather than later to determine any and all available options.

It will certainly make you feel a little lightheaded — in a good way — by relieving all that stress.

Legislation was introduced today in New Jersey that would create stricter requirements for mortgage solicitors in an attempt to reduce the growing number of foreclosures, according to the Herald News.

Currently in the Garden State mortgage solicitors — who are also known as loan officers or originators — need to fill-out a one-page form and fork over about $100 to issue loans on behalf of New Jersey lenders.

It’s not much in terms of applicant due diligence, considering families often plunk down hundreds of thousands to realize their dreams of homeownership.

And that’s the reason Trenton politicians and two state mortgage associations are throwing their support behind this bill.

Here’s a snip:

“… [the] legislation today that would require training, licensing exams and criminal background checks for loan officers. While mortgage-company owners must follow certain regulations, few of their employees do…. Many experts think the profitable commissions and low-education requirements for loan officers help contribute to skyrocketing foreclosure rates — as homeowners are pushed into mortgages they can’t afford.

Housing advocates stress that licensing requirements aren’t a magic bullet. Pending legislation in Congress and some state legislatures could do more to clean up the mortgage industry, they say, by holding lenders responsible for a borrower’s best interest.

According to the clip, as the housing market boomed over the last several years, the ranks of unregulated loan officers increased and flocked to the subprime market because these loans translate into big commissions.

In these cases, it appears that the mortgage servicers are looking out for their own interests rather than the homebuyers.

The moral of the story: Find a loan officer with a solid track record — one who comes highly recommended. Ask friends, family members Realtors® — anyone who has experience buying homes — about a trustworthy mortgage servicer.

It will pay off in the long-run … literally.

Bad — or unaffordable — home loans are no longer affecting unfortunate homeowners and lenders.

As the trend of more homeowners defaulting on their mortgages continues to increase, stock market investors are growing concerned with a possible “crisis in regard to subprime loans, according to U.S. News & World Report.

In fact, the Dow Jones industrial average tumbled more than 100 points yesterday, underscoring the impact the situation could have on the broader economy.

Here’s a snip:

“It’s stomach-turning time on Wall Street again. After plummeting more than 242 points Tuesday–and 416 points on February 27–the market began another downward march Wednesday on growing fears that the troubles in the subprime mortgage sector are turning into a full-blown financial crisis. And if there’s anything that Wall Street hates, it’s an unexpected crisis with unknown consequences.”

According to the article, an across-the-board rise in defaults and foreclosures means two things:

1. Consumers stop spending
2. Home prices could dip

And, according Merrill Lynch economist David Rosenberg, tightening lending standards might not be the silver-bullet solution.

Here’s a snip:

“Our biggest concern is that any tightening of lending standards in the mortgage market — even if confined to lower-quality borrowers — is going to constrain overall housing demand and make it more difficult for home sales and prices to stage a recovery.

We’ll continue to provide updates on this evolving issue … stay tuned.

Earlier this week, Freddie Mac — the second-largest provider of funds for home loans in the United States — announced that it would no longer purchase loans with, “a high likelihood of excessive payment shock and possible foreclosure.