Fannie Mae’s Program Intended to Streamline Modification of Mortgages. But Only Those Borrowers With Equity and Who Meet Eligibility Requirements Will Benefit.
Fannie Mae has announced that it is introducing a new mortgage loan modification program, Streamlined Modification, which targets borrowers whose mortgage loans are at least 90 days delinquent and who meet other eligibility requirements.
- Mortgages eligible for a Streamlined Modification:
- At least 90 days delinquent, but no more than 720 days delinquent;
- A pre-modified mark-to-market loan-to-value ratio (the gross unpaid principal balance of the mortgage loan divided by the current value of the property), greater than or equal to 80% (Ex. Property worth $300,000, gross unpaid principal balance – not including delinquent amounts – must be $240,000 or greater);
- A first-lien mortgage loan.
- To be considered eligible for a Streamlined Modification, a complete Borrower Response Package is not required.
- Borrowers will continue to be eligible for the Streamlined Modification even if a payment is received following the borrower evaluation or solicitation that results in the borrower subsequently becoming less than 90 days delinquent. However, the borrower must be at least 30 days or more delinquent prior to the commencement of the Streamlined Modification Trial Period Plan.
Eligibility Exclusion: Mortgage Servicers are required to implement these policies for borrowers who are eligible for a Streamlined Modification on or after July 1, 2013. The Streamlined Modification will expire on August 1, 2015; therefore, all Streamlined Modification Trial Period Plans must have an effective date on or before August 1, 2015.
You can read more about the program here.