WASHINGTON (4/9/09)—Credit unions and other lenders interested in participating in the Obama administration’s loan modification program should be aware of important online resources available to them, noted Jeffrey Bloch, Credit Union National Association (CUNA) senior assistant general counsel. Bloch, who organized last week’s audio call on the administration’s new Making Homes Affordable Program, noted that the program provides a number of incentives for all parties involved, including lenders, servicers, and borrowers. Also, holders of second mortgages may be given incentives to give up their lien positions. However, Bloch said, details of these incentives have not yet been made public. The speakers on the audio conference call included representatives from the U.S. Treasury Department, Freddie Mac, and Fannie Mae, all of whom gave a detailed overview of the program. Important points included:
* The program is voluntary for loans held in portfolio, however, servicers are required to participate for those loans owned or secured by Freddie Mac and Fannie Mae; * Fannie Mae has been designated the “financial agent” and will be manage the program with the Treasury Department; and * To participate in the modification program, lenders and servicers must execute an agreement with Fannie Mae and the agreements soon will be Fannie Mae’s website.
The Obama program has two main components. One is a refinance option, under which borrowers who are current on their mortgages may refinance their loan if it is owned or secured by Freddie Mac or Fannie Mae. The balance cannot be more than 105% of the home’s market value. The other part is a modification program in which a borrower who is not current on their mortgage may have an opportunity to modify his or her loan in order to lower the payments. Bloch said both Freddie and Fannie have substantial roles in both the refinance and modification programs and have posted extensive information on their websites, along with training opportunities. (Use resource links below.) “Credit unions will want to check both the Fannie and Freddie websites often for the latest information, especially since the requirements for Fannie Mae and Freddie Mac loans will vary somewhat,” Bloch advised. “Fannie Mae has also shared with us email addresses and phone numbers that credit unions may use if they have specific questions,” he added. For loans owned by Fannie Mae or Freddie Mac, call 1-888-326-6435 or send an email to firstname.lastname@example.org. For other loans, call 1-866-939-4469 or send an email to email@example.com. Use resource links below.