By Heath J. Thompson, P.C.
Fannie Mae and Freddie Mac have announced a new home loan modification program called the “Flex Modification” which combines features of the historically successful Home Affordable Loan Modification Program, and Fannie Mae’s Standard and Streamlined Modification programs which expired in December of 2016. The Fannie Mae Flex Modifications replace and upgrade the old plans.
A Flex Modification is designed to provide simplicity to both the borrower and the loan servicer. The program does several things:
- Consolidates three modification programs into a single solution,
- Removes the requirement for borrowers with mortgage loans 90 or more days delinquent to submit a complete borrower response package (BRP) to be evaluated for a Fannie Mae Flex Modification
- Adjusts the forbearance limits to provide greater payment relief to eligible borrowers, targeting a 20 percent payment reduction
- Borrowers are eligible even if they have had a previous modification
- Adjustable rate mortgages (ARM’s) are converted to fixed rate loans at current market rate
- Allows for vacant or condemned properties to be modified
- Allows for investment or vacation homes to be eligible for modification
Do you qualify for assistance?
- The mortgage loan must be a conventional first lien mortgage loan.
- For a principal residence, the mortgage must either be at least 60 days delinquent, or your servicer must determine that you are at risk of what they call “imminent default.”
- For a second home or investment property, the mortgage must be at least 60 days delinquent — imminent default isn’t enough for investment properties or second homes.
- The mortgage must have been originated at least 12 months before you apply.
- You must not have had more than three loan modifications in the past or have defaulted on a loan modification less than 12 months after completion of a Trial Period.
If you are struggling with your mortgage, you should contact your lender immediately and seek assistance. If you think you cannot afford your home and have considered surrendering it to the bank, please understand your options before you commit to that option. In many cases a homeowner’s mortgage payment can be reduced to well below average rental costs for their neighborhood. Real estate is not something to walk away from lightly.
If you need help with your real estate or loan modification issue, Attorney Thompson offers free consultations. Give him a call at 757-480-0060
Contact Heath J. Thompson or Jeana McMurray, esquires.