Freddie Mac Offers New Streamlined Modification

Freddie Mac has announced a new Streamlined Modification Program that it says will “open a new gateway to mortgage relief for many of American’s stuggling borrowers.”  Starting July 1, servicers will proactively offer the program to eligible borrowers who are 90 or more days delinquent on mortgages that are at least 12 months old.</p

The new program can cut monthly mortgage payments as much as other modification programs but does not require borrowers to submit documentation.  They merely accept the streamlined offer by beginning to make trial payments.  The modification becomes permanent  once the borrower demonstrates his or her ability to pay by completing the trial period.</p

Streamlined Modifications offer the same terms as the Standard Modification which Freddie Mac announced in September 2011.  Servicers can reduce the monthly payment through a combination of lowering interest rates, extending payment terms up to 40 years, and providing principal forbearance to some underwater homeowners.</p

Tracy Mooney, Freddie Mac’s Senior Vice President, Servicing and REO, said, “We look forward to working with our servicers to implement the Streamlined Modification initiative, which underscores our commitment to keep more financially troubled borrowers in their homes. Freddie Mac has helped an estimated 2.6 million families avoid foreclosure through mortgage modifications or refinancing since the housing crisis began.”</p

Detailed guidance implementing the Streamlined Modification can be found at FreddieMac.com.

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