By: Robert Harris, Oregon Real Esate Attorney
March 27th, 2013. Fannie Mae and Freddie Mac administrators announced they are simplifying the rules and process for seriously delinquint homeowners (Those more than 90 days past due) seeking loan modifications. Homeowners will no longer have to provide proof of hardship justifying the modification.
Another change provides that if a homeowner makes three reduced payments during their trial period, the modification automatically becomes permanent. Previously, the homeowner had to provide proof of hardship prior to the modification becoming permanent.
The new simplified rules will start in July 2o13, and end in August, 2015. Most Fannie and Freddie backed Loans are eligible. However, those that have already received two modifications are ineligible for this new streamlined program..
Mortgages that secure an investment property or a second home are eligible.
This program is in addition to the other loan modification programs available to homeowners. Most loans may see a 20% reduction in monthly payment. If a homeowner can show actual hardship, the monthly payment may even be lower.
Fannie and Freddie still refuse to reduce loan principle, but do allow some modifications that will reduce the interest rate, or extend the payment period.