Freddie and Fannie streamline modifications

Servicers cut red tape for eligible delinquent homeowners to speed up modification approval process.

Streamlined modifications have been pushed since July, 2013 for Fannie Mae and Freddie Mac servicers. This initiative encourages servicers to handle delinquencies earlier, minimizing losses to the Government Sponsored Enterprises (GSEs) and taxpayers, while cutting back some of the red tape that slows down the traditional approval process.

One important note is that all eligible borrowers must be willing and able to make three on-time trial payments through this initiative. Once those payments are made, the loan modification takes permanent effect.

To qualify, homeowners must be at least 90 days delinquent on their mortgage payments. The benefit is that no financial or hardship documentation is required. Overcoming the administrative barriers associated with document collection and servicer evaluation should allow more distressed homeowners to keep their homes.

Servicers will identify borrowers between 90 days and 24 months delinquent and send them a letter stating the terms of the modification and the payment required for the Streamline Modification. To accept the offer, eligible borrowers can accept the Streamline Modification Trial Payment Plan by sending the specified payment to the loan servicer.

The Federal Housing Finance Agency (FHFA) announced that the Streamlined Modification program will be extended through the end of 2015. This program is up and running with many servicers and has created a simplified process to help homeowners avoid foreclosure.

Homeowners who are having trouble paying their mortgage are encouraged to reach out for help as soon as possible.

To look-up who owns your loan, visit Fannie Mae and Freddie Mac. If your mortgage loan is owned by someone other than Fannie or Freddie, you need to contact your lender about its programs.

Fannie and Freddie also have a program for homeowners who are “under water” and wish to refinance.

For more information on the options available to struggling borrowers, visit:

Many Michigan State University Extension offices have housing counselors you can talk to for free and assist you to understand your options. Find one near you by visiting MI Money Health to call for an appointment in person, by phone or online.

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