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FHFA Announces Loan Modification Program for Fannie, Freddie


Federal Housing Finance Agency FHFA director James Lockhart announced on Tuesday that the FHFA, along with Fannie Mae and Freddie Mac, would be adopting a new, streamlined approach to loan modifications Lockhart said the loan modification program, which he is asking to be adopted as the industry standard, will take effect Dec. 15. The new approach will target high-risk borrowers who have missed more than three payments, and should help homeowners modify loans and prevent foreclosures, he said.
"Today we are announcing a major program designed to greatly reduce preventable foreclosures with a simplified, streamlined loan modification program to get struggling homeowners into mortgages that they can afford," Lockhart said. "It is an achievable goal if homeowners, banks, mortgage servicers, investors, Fannie Mae and Freddie Mac all work together." Lockhart said the key to success is the borrowers' ongoing co-operation and communication, and the ultimate aim of the program is to keep people in their homes. Speaking at the same press conference was Neel Kashkari, Treasury Interim Assistant Secretary for Financial Stability. Kashkari said a key part of stabilizing the financial system is to help homeowners avoid preventable foreclosures. "We are experiencing a necessary correction and the sooner we work through it, the sooner housing can again contribute to our economic growth. We must explore all tools to help homeowners and increase the availability of mortgage finance," he said. Kashkari said the Hope Now Alliance is currently helping more than 200,000 homeowners a month avoid foreclosure with a loan workout. "The adoption of this streamlined modification framework is an additional tool that servicers will now have to help avoid preventable foreclosures," he said. "This framework will not only help those homeowners who receive a streamlined modification, it will also further address servicer capacity concerns by freeing up resources, helping ensure that borrowers do not fall through the cracks because servicers aren't able to get to them."

By Patrick McGee and edited by Nancy Girgis

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We can help you stop foreclosure with a loan modification in the following states:

If you need help understanding your option of taking advantage of the home loan modification process, the help is available to you everywhere. The process is quite tricky and it is highly recommended that you do indeed seek legal advice before signing on the dotted line, in order receive the most efficient and cost-effective modification to your mortgage payment.

Where do I get Advice
There is advice all over the web on how to receive a loan modification; some of this advice is quite helpful, while some is quite dreadful. There is also the opportunity to hire a professional service that will help you go through the paperwork and work with the lender to help you get all the benefits that you deserve, due to a hardship. Loan modification is a process that must be understood completely and thoroughly. This article can actually offer you an insight on the process of loan modification and tips that will better help you as a homeowner save your home from the risk of a foreclosure.

Loan Modification Advice
First and foremost, it is important to determine if you are eligible for a loan modification. This requires writing a letter of hardship explaining to the lender what exactly the reason is for your late payments and the fact that you are unable to pay your mortgage. Doing a loan modification on your own requires more than just advice. Becoming educated about the process is more important. This is perhaps a good reason to hire a professional loan modification company to take part in the process. They will handle everything for you, while educating you in the progression. There is a fee charged for hiring these companies, but in turn your mortgage payment can be lowered quite a bit and professionals can even find things in your original loan papers that may prove that the lender may have broken the law during your original mortgage signing.

If you do choose to take the big leap of the loan modification process on your own, you must first contact the lender and they will lead you to the correct department, normally the loss mitigation department. You may not want to directly say that you are in the process foreclosure. We do not want the lender to think your situation is not worth their time before hearing you out. Always document anything relating to the loan modification process, every phone call and any other information you may receive during the process must be documented. Always discuss every option available with your lender, so that you may come up with the best alternative for you. It is true you will save money going directly through your lender and let’s face it, you are struggling already trying to make your payments, but professional assistance can help immensely.

No matter what direction you decide to take, loan modification will be what determines the amount of time you have in your home. If you are eligible you should act as soon as possible.

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