On Wednesday, negotiations were still being made in regards to a new deal, in the works by the government to prevent pending foreclosures. They are speculating to use $50 billion from the prior bailout provided to guarantee almost $500 billion in mortgages. The new deal or plan, may contain loan modifications to lower interest rates in a 5 year time span and is said to be the most proactive plan to date. It will be run by the Federal Deposit Insurance Corp; one of their spokesmen, Andrew Gray, said that it is “premature to speculate about any final framework or parameters of a potential program.”

A spokeswoman from the Treasury Department, Jennifer Zuccarelli, remarked that the details being spread about the plan are inaccurate and that a defined approach has not been decided upon yet. Borrowers are tired of waiting however. Over 100 demonstrators marched in front of Fannie Mae´s headquarters on Wednesday, holding signs saying “Fannie Mae destroys lives”, “Foreclose on Fannie Mae.”, and “Restructure our loans now”, forcing a meeting with the chief executive of Fannie, Herbert Allison. Bruce Marks, the chief executive of the Neighborhood Assistance Corp. of America feels that Fannie should use a program like that used by the FDIC when IndyMac failed, giving borrowers interest rates at 3% for 5 years. He said that Fannie, due to their size in regards to mortgage amounts, “sets the standard” for the industry; a negative standard as “They talk and they talk and they never do.”

Based on data from the Mortgage Bankers Association, at the end of June, almost 4 million homeowners were behind one mortgage payment, and 500,000 were in a foreclosure state. During the past 10 weeks, Fannie has received over 40,000 default loans and prevented 80% of those from entering foreclosure. Senator Christopher Dodd, the chairman of the Senate Banking Committee, stated that the ”federal agencies and financial institutions must do more to modify the mortgages they hold in order to stop foreclosures and help families keep their homes.”