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Loan Modification- available sooner for homeowners, avoid foreclosure
Publication: The Columbus Dispatch;Date: Dec 21, 2008;Section: Home & Garden;Page: I4
THE NATION'S HOUSING- Homeowners can modify loans sooner
Here's some good news for homeowners facing tough financial times: You no longer have to miss two to three months of payments before your mortgage company can modify your loan terms.
Starting immediately, Fannie Mae will allow borrowers who face imminent financial difficulties to request early loan alterations, even if they've never been late.
Fannie's policy change has the potential to help thousands of people who are losing jobs or facing layoffs as the recession crunches onward.
Most lenders and loan servicers traditionally have declined to intervene in mortgage problems until borrowers are 60 to 90 days late.
At that point, loss-mitigation staffs can try to work out solutions through rescheduling of back payments, forbearance, extending the loan term and other techniques.
Under Fannie Mae's revised approach, servicers of the company's loans will be required to inform borrowers that if they are reasonably certain that changes in their income will cause them to miss mortgage payments, they might qualify for a loan modification in advance.
Borrowers who qualify will enter into a trial period - usually four months - of reduced ... more
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