Scott Moize Jr.

Great Western Home Loans

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Simplified Home Loan Modification Program Recently Announced

April 4, 2013 by Scott Moize Jr.

Simplified Modification Initiative AnnouncedThe Federal Housing Finance Agency (FHFA) recently announced a new, streamlined home loan modification program to help Texas home owners who are behind in their payments or own a home with a mortgage that is under water.

The purpose of the recently announced program continues to focus on helping troubled borrowers avoid foreclosure and stay in their homes.

Simplified Modification Criteria Creates More Opportunity For Home Owners

Beginning this summer, on July 1st to be exact, the new Streamlined Modification Initiative will be available to home owners that meet certain criteria.

Interestingly, this new program will require home loan servicers to provide eligible home owners whose loans are owned or guaranteed by Freddie Mac or Fannie Mae with a 90 day trial modification without requring financial or hardship documentation.

The terms of this new program have been disclosed as a way for borrowers who are at least 90 days past due on their mortgages to convert their home loan to a fixed rate mortgage with the term of the loan extended to 40 years for the lowest amortized monthly payment.

Eligible borrowers will receive this short term modification program in order to show “good faith” by making 3 on-time monthly payments.  

Upon successful completion of this trial modification period, the Streamlined Modification Initiative will direct the loan servicer to extend the home loan modifcation permanently.

Home Affordable Modification Program Still Available

The new home loan modification program was developed to become an alternative to the already established Home Affordable Modification Program (HAMP).

One important note is that homeowners who continue to investigate all loan modification options with their loan servicer may save even more than the savings offered through the new Simplified Modification Initiative.

Potential For Principal Reductions

Language in the Streamlined Modification Initiative mentions that some home owners who are under water with regard to their mortgage may be entitled to principal reduction as a component of their home loan modification.

The specific details and criteria for these principal reductions have not been specified, although contacting your trusted, licensed mortgage loan professional would be an excellent way to uncover the details.

 

Filed Under: Mortgage Guidelines Tagged With: FHFA,Home Loan Modification,Underwater Mortgage

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Consumer Compliant & Recovery Fund Notice

CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550.
THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.

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