Streamlined Modifications for Fannie Mae and Freddie Mac Mortgages. Beginning July 1, 2.
Fannie Mae and Freddie Mac will offer a new, simplified loan modification program to help troubled borrowers avoid foreclosure and stay in their homes. Read on to learn more about the “Streamlined Modification Initiative” and find out if you qualify for relief under this program. The Streamlined Modification Initiative.
On March 2. 7, 2. Federal Housing Finance Agency (FHFA) announced the latest program designed to help borrowers save their homes. The Streamlined Modification Initiative provides an efficient, no- document way for certain delinquent borrowers to obtain a permanent loan modification. Eligibility. Under the Streamlined Modification Initiative, mortgage servicers are required to send you a letter offering you a modification if you meet all of the following criteria: Your loan is owned or guaranteed by Fannie Mae or Freddie Mac.
This modification is known as the Home Affordable Modification Program or HAMP. and Fannie Mae have their own guidance for HAMP. HAMP eligibility. Eligibility criteria for a Fannie Mae HAMP modification; The mortgage loan must be a first lien conventional mortgage loan originated on or before. Fannie Mae – HAMP Program Documentation Index. Key: SG = Fannie Mae Servicing Guide, Part VII (As of September 11, 2010) FAQ = “Frequently Asked Questions.
. New Guidelines for Home Loan Modification. 0. HAMP Eligibility. in the mortgage principal reduction program by including Fannie Mae and Freddie Mac. The mortgage giants Fannie Mae and Freddie Mac released new guidelines for their servicers modifying mortgages under the Home Affordable Modification Program (HAMP). What is HAMP? HAMP is designed specifically to help homeowners impacted by financial hardship. The goal of a HAMP modification is to reduce your monthly mortgage. Benefits and overview of HAFA short sale program for. for HAMP. Eligibility and. in HAMP also participate in HAFA. Fannie Mae and Freddie. Beginning July 1, 2013, Fannie Mae and Freddie Mac will offer a new, simplified loan modification program to help troubled borrowers avoid foreclosure and stay in. Making Home Affordable. The Making Home Affordable Program includes Fannie Mae Home Affordable Refinance options and the Home Affordable Modification Program.
You are 9. 0 days (3 months) to 7. You have a first- lien mortgage that is at least 1. Your loan- to- value ratio is equal to or greater than 8.
Loans that have been previously modified two or more times are ineligible for the program. Strategic defaulters are also excluded. According to the FHFA, Fannie Mae and Freddie Mac have existing screening measures to prevent strategic defaulters from taking advantage of the program.)Second homes and investment properties are eligible to participate. To find out if either Fannie Mae or Freddie Mac owns your loan, go to www. How the Program Works. As of July 1, 2. 01.
Streamlined Modification. Upon receiving the letter, the borrower can simply submit the modified payment to begin the trial period. The borrower must successfully complete the three- month trial period to obtain a permanent modification. If the borrower makes the three payments on time, the mortgage will be permanently modified. However, if the borrower misses a payment during the trial period, he or she will not be eligible for a permanent modification under the program (though another foreclosure alternative may be available). The Streamlined Modification Initiative is a temporary program that is scheduled to end on December 3. This means all Streamlined Modification trial period plans must have an effective date on or before that date. To learn about your options if you are struggling to pay your mortgage, get The Foreclosure Survival Guide.
Key Feature of the Streamlined Modification Initiative. The key feature of this program is that borrowers do not have to document an eligible hardship or their income to be qualify for a Streamlined Modification. This is different from HAMP and other loan modification programs. The FHFA believes that by reducing the amount of documentation required to obtain a modification, significantly more borrowers will be able to save their homes. Borrowers Are Still Encouraged to Submit Documentation.
Even if you are eligible for a Streamlined Modification, you are still encouraged to provide financial, income, and hardship documentation to your servicer so that you can be considered for other modification options, like HAMP. While submitting a full application may sound like a hassle compared to the ease of a Streamlined Modification, you might get a more affordable monthly payment through HAMP (or another program) than you would under the Streamlined Modification Initiative. In addition, borrowers may be eligible to receive certain incentives under HAMP. If you have questions about HAMP, see The Home Affordable Modification Program (HAMP). You can also call 8. HOPE (4. 67. 3), go to www. To learn about other government programs for struggling homeowners, visit Nolo's Government Foreclosure Prevention Programs area. Call Your Mortgage Servicer if You Need Help.
While a Streamlined Modification might sound like a great deal, it is best not to sit around waiting for the offer if you are currently struggling to make your payments. Call your mortgage servicer as soon as possible so you can be evaluated for an alternative to foreclosure that is appropriate for your situation.
See Nolo’s Alternatives to Foreclosure section to learn more about different loss mitigation options.
HAFA Short Sale Program Eligibility. By Elizabeth Weintraub. February 2. 6, 2. The HAFA short sale program, effective from April 5, 2.
December 3. 1, 2. HAFA promises short sale approval within 1. But because HAFA is a government- sponsored program, it's a lot more complicated than that. HAFA is an acronym for Home Affordable Foreclosure Alternatives, and it's part of President Obama's Making Home Affordable Program. The first step is for a borrower to apply to HAMP, Home Affordable Modification Program.
Here are the rules to be eligible for the HAMP program: В Only personal residences are eligible. The mortgage amount must be less than $7. The borrower suffers a hardship such as loss of income, an increased mortgage payment or an unexpected increase of expenses. The mortgage originated before January 1, 2. The PITImortgage payment, including HOA, is more than 3.
If any one of the 5 rules do not apply, then the borrower is not eligible for HAMP. I know this because I went to the Home Affordable Modification page to answer each of the 5 questions. I did this 5 times, and changed a different answer to no each time.
A no answer to any one of the 5 resulted in a rejection. If you are not eligible for HAMP, then you may need to find a short sale agent to help you. If you are eligible for HAMP, it does not mean that you will qualify for HAMP. Eligibility and qualification for HAMP are two different animals.
Your goal, if you want to do a short sale, is to hope that HAMP will turn you down. Then you will be eligible for HAFA. Or, if accepted into HAMP, and you stop making your loan modification payments, you can apply to HAFA. This may sound like goofy rules, but it's the way our government works. I think it's interesting to point out that very few borrowers tend to qualify for a loan modification.
In fact, almost every single short sale that I do in Sacramento is for a seller who was rejected for a loan modification. В Determine if Your Lender Participates in the HAMP Program. It's handy to know if your lender participates in HAMP, because lenders that participate in HAMP also participate in HAFA.
Fannie Mae and Freddie Mac lenders are not required to participate and have their own versions of this program. Here is a partial list of some of the big- name HAMP participating lenders: В Aurora Loan Services, LLCBank of America, NAChase Home Finance, LLCCiti. Mortgage, Inc. Countrywide Home Loans Servicing, LPEMC Mortgage Corporation. GMAC Mortgage LLCGreen Tree Servicing LLCHome. Eq Servicing. Horizon Bank. J. P. Morgan Chase Bank, NALitton Loan Servicing.
Navy Federal Credit Union. Ocwen Financial Corporation, Inc. One. West Bank. PNC Bank, National Association.
Saxon Mortgage Services. The Golden 1 Credit Union. US Bank, National Association. Wachovia Mortgage, FSBWachovia Bank, NAWells Fargo Bank, NAВ Eligibility Requirements for HAFA Short Sales. Once the borrower is rejected for a loan modification through the HAMP Program, the borrower is then eligible to apply to the HAFA Short Sale program or pursue a Deed in- Lieu- of Foreclosure. Since I don't know why anybody in their right minds would do a deed in- lieu, I'll stick to the short sale process.
HAFA will preapprove the price of that short sale and give the seller 4 months to sell the property through a real estate agent. Here are the eligibility requirements: В Personal residences are eligible. As of June 1, 2. 01.
HAFA. The mortgage amount must be less than $7. The seller must be behind or about to fall behind on the mortgage. The mortgage originated before January 1, 2. The seller was or would be rejected by HAMP for a loan modification. Sellers who have government loans may qualify under a different program. В Benefits to a HAFA Short Sale.
After a seller has jumped through all of these hoops, there should be benefits, right? There are. For example, second lenders can no longer try to force a seller to commit short sale mortgage fraud by demanding payments outside of escrow or holding the seller's first- born as collateral. Here are other HAFA benefits: В Lenders that participate in HAFA waive the right to a deficiency judgment.
At the beginning, junior lenders could receive up to 6% of the loan balance or $6,0. As of Feb 1, 2. 01. U. S. Treasury - - and that amount is now a maximum of $8,5.
June 1, 2. 01. 2. As of February 1, 2. Sellers will receive a government payment of $1. Sellers will not be required to make a seller contribution. Lenders must agree not to foreclose during the short sale process.
With the exception of Fannie Mae, Freddie Mac, VA and FHA loans, the sellers' mortgage payment does not need to exceed the 3. Another condition of HAFA is all parties must sign an arm's length affidavit. In other words, the seller cannot sell to a person the seller knows or to whom the seller is related. The buyer must also agree not to sell the property for a minimum of 9.
At the time of writing, Elizabeth Weintraub, DRE # 0. Broker- Associate at Lyon Real Estate in Sacramento, California.