The Standard Modification is for borrowers who do not qualify for the government’s Home Affordable Modification Program (HAMP). The modification makes payments more affordable by lowering a borrower’s principal and interest payments by at least 10 percent. The modification includes a trial period as does HAMP to ensure borrowers can maintain modified mortgage payments.
When evaluating a borrower for a Standard Modification in Workout Prospector®, users will be prompted to apply the 4.625 percent interest rate if the “Workout Decision Date” is on or after June 1.
Servicers may implement the new interest rate sooner. However, new borrower evaluations done before July do not require the new rate.
Freddie Mac may adjust the interest rate used for Standard Modifications based on market conditions.
The Freddie Mac Standard Modification is part of the Servicing Alignment Initiative, which is an effort to create consistency in how delinquent GSE loans are serviced.
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