There is another option for loan modifications. The new program has some features that are absent from other federal and private options.
There is more good news for homeowners who have fallen behind in mortgage payments. The Federal Housing Finance Agency’s new Streamlined Modification program, scheduled to begin on July 1, has begun.
The program offers a new, simplified loan modification process that will allow troubled borrowers to lower payments and stay in their homes without having to produce financial or hardship documentation.
Who can participate?
“To be eligible, a borrower must be at least 90 days, but no more than 720 days, delinquent on mortgages that are at least 12 months old and meet certain other criteria.”
Here’s what you need to know about the program:
1. It’s a different kind of program:
The program is something quite different from HAMP and HARP. What is does is make the mortgage servicers in charge of providing relief to struggling homeowners rather than requiring the homeowner to chase down and make contact with their mortgage company.
2. Homeowners have several options for modification:
The Streamlined Modification enables servicers to modify a borrower’s mortgage by adjusting interest rates, extending payment terms to 40 years, and providing principal forbearance for certain underwater borrowers.
3. Acceptance into the program is relatively easy:
Eligible borrowers will need to demonstrate a willingness and ability to pay by making three on-time trial payments, after which the mortgage will be permanently modified. Borrowers will still have the option to document income and financial hardship, which could result in a modification with additional savings.
Many programs limit the length of time that a homeowner can be delinquent. Most programs limit a home owner to no more than one year delinquency. However this program allows an owner to be almost two years delinquent and still receive modification.
I have already encountered servicing agents that are unfamiliar with this program. As always, you have to assert your rights in order to get relief!!
Paddy Deighan J.D. Ph.D
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