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October 09, 2014

Now: Streamlined Loan Mod for Those Who Haven't Paid for 2 Years

Homeownership

Streamlined Loan Modification

Freddie Mac is making it easier for servicers to help borrowers who have been delinquent for two or more years.  For the first time, Freddie Mac's "streamlined modification" is now available to borrowers who haven't made a mortgage payment for more than 720 days. 

Previously, lenders didn't look at borrowers who had been delinquent that long for a streamlined mod.  Here's why that's important.  In a streamlined mod the servicers identify eligible borrowers and send them solicitation letters plus trial period plans. There's no paperwork for the borrower to enter into a trial period plan and they can enter into a modification agreement to permanently change the terms of their loan by making their trial period payments on time. 

Freddie Mac is making this change so lenders can cast a wider net when determining which borrowers are eligible for a streamlined mod trial period in an effort to help more seriously delinquent borrowers keep their homes. What's more, Freddie Mac is encouraging servicers to immediately implement the change (or as soon as they can) and not wait until April 1, 2015 when servicers must implement the expanded initiative. 

Delinquent borrowers who don't receive a streamlined modification solicitation letter should call their servicer to determine their best options for staying in their home in addition to other options that avoid foreclosure.

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