December 3rd, 2008 12:06 PM by Lehel Szucs
As you may have seen, there have been two important national announcements recently regarding assisting homeowners in distress during this difficult period.
First, on November 11th, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae, Freddie Mac, HOPE Now and other industry partners would be implementing a streamlined modification program to assist borrowers in distress. This program is aimed at the highest risk borrower who has missed three payments or more, owns and occupies the primary residence, and has not filed for bankruptcy. The program creates a fast-track method for getting troubled borrowers into an affordable monthly payment through a mix of reducing the mortgage interest rate, extending the life of the loan or even deferring payments on part of the principal. Servicers have flexibility in the approach, but the objective is to create a more affordable payment for borrowers at risk of foreclosure. The program is scheduled to launch on December 15. For more information, see the FHFA News Release:
Second, on November 20, Fannie Mae (and Freddie Mac) announced that in order to support the streamlined modification program announced on November 11, we have notified our loan servicing organizations and retained foreclosure attorneys that they should suspend foreclosure sales on occupied single-family properties, as well as the completion of evictions from occupied single-family properties, scheduled to occur from November 26, 2008 until January 9, 2009. For more information on this announcement, please see this press release:
Regarding the announcement yesterday, Fannie Mae President and Chief Executive Herb Allison noted: "The streamlined modification program by Fannie Mae, Freddie Mac, Hope Now and 27 mortgage servicers is an important step forward in addressing the systemic issues driving the increase in foreclosures. Until the streamlined modification program is fully implemented, we felt it was in the best interest of both borrowers and Fannie Mae to take this extra step to ensure that homeowners with the desire and ability to prevent a foreclosure have an opportunity to stay in their homes. We encourage other servicers of non-GSE mortgages to participate in the streamlined modification program to bolster our collective efforts to stem the foreclosure crisis."
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