According to article in CNNMoney – starting July, 2013, hundreds of thousands of struggling borrowers could be in for a pleasant surprise: a quick and easy way to get their mortgage payments back on track — and save considerable money.
Through a new effort called the Streamlined Modification Initiative, borrowers with mortgages backed by Fannie Mae and Freddie Mac who are at least 90 days behind on payments will start receiving loan modification offers from lenders to lower their mortgage payments.
Mortgage Bankers Association reported in May that about 1.1 million borrowers are behind on their loans by three payments or more.
Loan Modifications may be available soon
The Federal Housing Finance Agency (FHFA), which oversees Fannie and Freddie, won’t say how many delinquent homeowners will receive the modifications, but the Mortgage Bankers Association reported in May that about 1.1 million borrowers are behind on their loans by three payments or more. Not all of those mortgage holders have Fannie or Freddie loans, however.
The loans must be at least 12 months old, borrowers can’t be more than 24 months behind on payments and their principal balances must be 80% or more of the value of their homes. The new program is scheduled to last through December 2015.
MUSINGS BY DIANE: “A warning about loan modifications – make sure to closely review the terms of the modification. If the modification will work for you in the long run – go for it. But, if the modification is merely delaying the inevitable – think about letting the house go. Also, be aware that you may be signing away the opportunity to participate in future loan modifications. Therefore, it is very important this current modification is the right fit for you now and in the future.”
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