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Streamlined Loan Modification

(CRS.com)

The Federal Housing Finance Agency announced a simplified loan modification initiative that is intended to help troubled borrowers avoid foreclosure and stay in their homes. Beginning July 1, 2013, lenders will offer eligible borrowers who are at least 90 days delinquent on their mortgage an easier way to lower their monthly payments and modify their loan without requiring documentation of their financial hardship.

Borrowers must demonstrate a willingness and ability to pay by making three on-time trial payments, after which the mortgage will be permanently modified. Borrowers are encouraged to work with their lender to evaluate other foreclosure prevention options, however.

The program is available to borrowers whose loans are owned or guaranteed by Fannie Mae or Freddie Mac.

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