As the government-sponsored enterprises seek to expand their lines of business by traveling down the credit curve into subprime territory, Freddie Mac is now working on a new mortgage program that will allow borrowers to reduce their interest rates over the course of the loan.

The program "will increase liquidity for mortgages that allow borrowers to move to a lower rate after 24 consecutive months of good payment history without having to refinance," said Freddie Mac's chief credit officer David Andrukonis, at a conference on predatory lending in Atlanta last week. It is intended to help borrowers with an impaired credit history.

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