Fannie, Freddie to unveil subprime plans: WSJ

The headquarters of mortgage lender Fannie Mae is shown in northwest Washington October 3, 2006. The chief executives of mortgage finance companies Fannie Mae and Freddie Mac are expected to unveil plans on Tuesday to help subprime borrowers, the Wall Street Journal reported on its Web site.

NEW YORK (Reuters) - The chief executives of mortgage finance companies Fannie Mae FNM.N and Freddie Mac FRE.N are expected to unveil plans on Tuesday to help subprime borrowers, the Wall Street Journal reported on its Web site.

Fannie Mae Chief Executive Daniel Mudd and Freddie Mac's Richard Syron are due to testify before the U.S. House of Representatives Financial Services Committee on Tuesday. Subprime lenders extend mortgages to people with weak credit.

Mudd plans to tell the panel that Fannie Mae is expanding its products to let subprime borrowers refinance out of some adjustable-rate mortgages, the Journal reported, citing prepared congressional testimony.

Mudd also plans to say that Fannie Mae is adjusting its credit requirements to allow more borrowers to qualify for the option, the Journal reported.

Fannie Mae will also purchase 40-year loans on the secondary market, the Journal said, citing Mudd's testimony.

Freddie Mac's Syron plans to tell the panel that his company is developing 30- and 40-year subprime loans with reduced margins and longer fixed-rate periods, the paper said.

Freddie Mac and Fannie Mae could not immediately be reached for comment.