After doing some internal reconstruction, the new heads of Fannie Mae and Freddie Mac, both recently hired 7 weeks ago after the government bailout of the two organizations, are brainstorming on how to prevent the numerous foreclosures pouring into the already troubled market. They want to try and do all that they can, even though they know that in some areas, it may take years to repair the damage done. The CEO of Freddie Mac, David Moffet, during the Mortgage Bankers Association annual convention, said "I don't think there is any magic bullet in regards to overbuilt markets" like Miami and parts of California, Nevada and Arizona". The CEO of Fannie, Herbert Allison, made similar remarks, as well as assuring lenders that Fannie is open to any possible ideas/solutions to try and help the industry.

Both Fannie and Freddie combined, own/guarantee near $5 trillion of all outstanding mortgages in the nation. They are operating in a conservatorship that lets the government input up to $100 billion per company in exchange for around 80% in ownership stakes. An unknown source, has also reported that both have applied to manage assets under a $700 billion government rescue program, made through a financial system passed by Congress Oct. 3rd. To date, Fannie and Freddie, as well as the Treasury Department have no comment on this.

Moffet and Allison state that so far they are focusing on renegotiating terms of numerous mortgages where the borrowers are or about to default. Fannie and Freddie are doing this in an effort to prevent more foreclosures, which would only lead to a further drop in home prices. While Fannie has prevented over 300,000 foreclosures this year, Allison says "that is not good enough. We need to ramp up our activities." Both Allison and Moffet know that it is unrealistic to expect to save all delinquent borrowers. Also, according to James Lockhart, the director of the FHFA, some borrowers should not be given such lenient assistance as they came into their properties for investment and not living purposes. Of course, there are those who still feel the lenders should be more forgiving/assisting, especially since the government will be spending almost $1 trillion more to help Fannie, Freddie, the American International Group inc (an insurer), and numerous banks; a protest rally was even held at the Mortgage Bankers Association convention.