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FHFA announces streamlined loan mods
WASHINGTON (11/12/08)—The Federal Housing Finance Administration (FHFA) Tuesday announced a streamlined mortgage loan modification plan the agency said is intended to complement existing loss mitigation programs. According to the FHFA, which regulates Fannie Mae and Freddie Mac and the Federal Home Loan Banks, the program targets highest risk borrowers who have missed three payments or more, own and occupy the property as a primary residence, and have not filed for bankruptcy. “Fannie Mae and Freddie Mac own or guarantee almost 31 million mortgages, about 58% of all single family mortgages. Although these mortgages only represent 20% of serious delinquencies, I believe their leadership role combined with the many partners of HOPE NOW should spread this approach throughout the whole mortgage loan servicing business,” said FHFA Director James Lockhart. Homeowners who are spending up to 38% of their income on their mortgage payment and are threatened with foreclosure could have their monthly payments reduced by Fannie and Freddie under the program. Lockhart said the new program is the result of a unified effort involving Fannie and Freddie, the administration’s HOPE NOW program and its twenty-seven servicer partners, the U.S. Department of the Treasury, the Federal Housing Administration and FHFA. He said the group also drew on the expertise of the Federal Deposit Insurance Corp. The FHFA director said Fannie Mae and Freddie Mac soon will issue specific guidance to their servicers, and added that implementation will be required by Dec. 15. To encourage participation, servicers will receive a fixed payment of $800 for each loan modified through this program. Use the resource link below for more information.
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