Fannie Mae unveils the broad sketches of a new loan modification program today in an attempt to stem the cascading effect of mortgage foreclosures nationwide. FHFA Director James B. Lockhart, the regulator of Fannie Mae (NYSE: FNM), Freddie Mac (NYSE: FRE) and the Federal Home Loan Banks, announced a simplified, streamlined loan modification program to help troubled borrowers get affordable monthly payment. The program will start December 15, 2008 and details of the program are still very sketchy. It will be interesting to see whether government pressure will force investors to modify loans at rates below market. Speculation from one news anchor on CNBC opined as to whether rates could be possibly as low as 3% because that would be the only way to make the loans afforable since many home owners may not qualify for the 38% DTI ratio required by the program.  That is, home payment, including homeowner association dues, could be no more than 38 % of the household’s monthly gross income. As such, principal foregiveness may be a secondary measure to allow these borrower’s to qualify.