Fannie, Freddie lower mortgage lending standards further

Fannie Mae (FNM) and Freddie Mac (FRE), two wards of the government, have announced they will lower lending standards to encourage refinancing for mortgage holders who have gone underwater due to falling prices. The new push comes as the Washington Business Journal reports that Freddie received an additional $6.1 billion from the Treasury Department to cover additional losses in the last quarter.

The adjustment is part of the Home Affordable Refinance Program, introduced by the Obama Administration to help homeowners avoid foreclosures. Some 1.5 million to 2 million homeowners have signed up, according to initial estimates, but a Mortgage Bankers Association release said that as of June 22, only 13,000 loans had been completed using HARP.