Loan Modifications, Proactively

June 23, 2013
New York Times  
mortgage lending news

The Federal Housing Finance Agency's new Streamlined Modification Initiative is a new foreclosure-prevention program that proactively targets borrowers who are three months to two years behind on their mortgage payments. The agency aims to simplify the process by eliminating documentation requirements, proof of financial hardship, and even borrower signatures -- all to achieve the goal of enrolling struggling homeowners early enough to keep them in their homes. After making three monthly payments on time, the modification becomes permanent; and borrowers who owe more on their mortgage than their home is worth will not pay interest on up to 30 percent of the unpaid loan balance. The program was scheduled to take effect on July 1, but Fannie Mae and Freddie Mac have already started soliciting borrowers for participation in the initiative.
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