The Federal Housing Finance Agency (FHFA) today announced that Fannie Mae and Freddie Mac will offer a new, simplified loan modification initiative to minimize losses and to help troubled borrowers avoid foreclosure and stay in their homes. Beginning July 1 2013, servicers will be required to offer eligible borrowers who are at least 90 days delinquent on their mortgage an easy way to lower their monthly payments and modify their mortgage without requiring financial or hardship documentation.

The new Streamlined Modification Initiative eliminates the administrative barriers associated with document collection and evaluation. Eligible borrowers must demonstrate a willingness and ability to pay by making three on-time trial payments, after which the mortgage will be permanently modified. Homeowners are encouraged to continue working with their servicer to evaluate all of their foreclosure prevention options. Documenting income and financial hardship could result in a modification with additional savings for the borrower.

The Streamlined Modification Initiative builds on the principles of the Servicing Alignment Initiative by encouraging servicers to resolve delinquencies earlier and in a more consistent and expeditious manner to keep more people in their homes and to minimize losses to Fannie Mae, Freddie Mac and taxpayers. The program expires August 1, 2015.

The program is available to those homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac. Since being placed into conservatorships, Fannie Mae and Freddie Mac have completed 2.7 million foreclosure prevention transactions, including 1.3 million loan modifications. We surely want fewer people foreclosed and if there’s a way to modify mortgages that makes financial sense for both lenders and borrowers then you should contact our office at 305-227-4030 to discuss the matter further.

Ray Garcia, Esq.

Board Certified in Real Estate Law

By The Florida Bar

www.raygarcialaw.com