Fannie Mae Wants You to

Cary Jacobs (not his real name) was out of work a year when his bank's collections agency started calling to tell him that the home his family had lived in for six years was about to be foreclosed on unless he could come up with another payment. Cary never told his wife about the calls. "I've worked my whole life and paid every bill on time," he said. "I'm just two payments behind, but the bank won't talk to me."

This week, an unlikely source is coming to the rescue of people like Cary. Fannie Mae, one of the nation's two giant government-sponsored enterprises (GSEs) guaranteeing mortgage lending, unveiled a new website,, designed to take the sting and shame out of seeking help against foreclosure.

Cary is hardly atypical. Anyone who has ever fallen behind in their mortgage has probably had at least one moment when they realized that their home could be taken away from them. Once the bank starts calling for its money, fear, shame and loneliness are natural feelings. At that moment, friends, family, banks and accountants -- and all the power of government programs to help homeowners -- seem powerless to help. Worst of all, many of the websites that say they can help are foreclosure scammers in disguise.

"We started KnowYourOptions because we've learned everything about this situation there is to know," says Jeff Hayward, the Fannie Mae senior vice president who masterminded the site. "What makes it unique is that as an investor in mortgages, we see every mortgage. We were going to loan fairs and outreach events early in the crisis, so we saw exactly the kinds of questions borrowers needed answers to. Banks are right in the thick of it, they have to service the mortgages. We may be in a better position than they are to help."

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From the virtual video tour that greets you the moment you visit the site's home page, KnowYourOptions does a terrific job of helping homeowners facing foreclosure find unbiased assistance in sorting out the mass of private and public assistance programs. With easy, step-by-step directions, the site guides you to simple financial solutions designed to help you stay in your home. Or not: Unlike other mortgage modification websites, KnowYourOptions doesn't assume that the only way forward is to cling to your home.

Instead, the site details options to stay or to leave -- what it calls "graceful exits" -- and does so with smart videos from people who've walked in your shoes. (The site even accommodates Spanish speakers, many of whom were disproportionately affected by the subprime lending boom, with a one-to-one translation of every video and webpage.)

Although a website probably can't calm the palpitations that accompany the receipt of a certified foreclosure letter from the bank, KnowYourOptions takes care to help homeowners know that they are not alone. Leads to mortgage companies and loan companies abound, and calculators that are tied to PDF document generators -- so you can e-mail the results to yourself and others -- will prepare you for calling your lender.

After all, says Hayward, servicers are overtaxed, and when you call, you need all the ammo you can, "so you can keep the servicer engaged."

"The banks are deluged," he says. "They acknowledge they have their problems, but it's better for everyone if the information is out there and in the public so they can process even more people." isn't perfect -- its calculators could contain more financial detail and the site should have a more comprehensive list of banks and mortgage lenders on the site. (Hayward says it's coming) But it goes a long way toward easing the terror of foreclosure and, instead, putting real options on the table.

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