GSEs Make New Simplified Mod Program Available Immediately
By: Esther Cho
Fannie Mae and Freddie Mac are offering the new Streamlined Modification Program to distressed borrowers before the effective date of July 1.
Rather than delay assistance to borrowers, Freddie Mac stated it is making the program immediately available to all eligible borrowers across the country, according to a release. In an email, Fannie Mae also confirmed the program is already available.
As part of the program, Fannie Mae and Freddie Mac borrowers who are at least 90 days delinquent but no more than 720 days past due may be eligible for a modification that does not require the borrower to submit financial or hardship documentation.
The program requires servicers to send modification offers to all eligible borrowers. The solicitation letter will include details for a three-month trial period plan. In order for the modification to become permanent, the borrower must make on-time payments for the three-month trial plan to prove ability to pay.
“Today, Freddie Mac is giving a green light to its mortgage servicers to speed up financial relief for potentially thousands of families with delinquent mortgages across the nation. Now mortgage servicers can send eligible borrowers their Streamlined Modification trial period terms as soon as they are ready and borrowers can modify their loans by making the three trial period payments on time…Freddie Mac is focused on adding momentum to the housing recovery by giving distressed borrowers more options to avoid foreclosure,” Freddie Mac stated in a release.
To be eligible, the loan must also be a first-lien mortgage that is at least 12 months old with a loan-to-value ratio equal to or greater than 80 percent.
Fannie Mae and Freddie Mac revealed details of the Streamlined Modification program in separate announcements.
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