Eligible borrowers will be able to take advantage of Freddie Mac's streamlined modification program immediately, instead of waiting until the original scheduled start date of July 1.
Freddie Mac says it expects to add momentum to the housing recovery by helping potentially thousands of distressed borrowers modify their mortgages.
Not much paperwork needed
The program, which had been extended early to homeowners affected by Superstorm Sandy, is now available to the entire country. Eligible borrowers are not required to provide documentation. Instead, servicers notify borrowers who meet eligibility requirements. Among those requirements:
- Borrowers have to be at least 90-days late with their mortgage payments.
- Borrowers can't be more than 720-days late with their mortgage payments.
- The mortgage has to be at least a year old.
Except for the reduced paperwork requirement, the streamlined modification program works the same as the standard modification program. Servicers can:
- Reduce monthly mortgage payments by adjusting interest rates.
- Extend payment terms to 40 years.
- In some cases, provide principal forbearance.
After eligible borrowers have demonstrated their ability to make on-time payments during a three-month trial, the modification becomes permanent.
Freddie Mac says it has helped 830,000 distressed borrowers avoid foreclosure since 2009 through its various programs. For more details on the streamlined modification program, visit the website FreddieMac.com.
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