Saturday, May 18, 2013

Streamlined Modification Initiative to begin July 1, 2013

The Streamlined Modification Initiative will allow certain eligible delinquent homeowners to qualify for a new mortgage modification without having to provide the voluminous documentation and hardship information typically required to get a modification.  Borrowers delinquent more than 90 days, but less than 720 days may qualify.  Servicers are required to send Streamlined Modification Solicitation Letters to all borrowers who would qualify, even without the borrower applying.  Those borrowers who receive the letters and show a willingness and ability to pay will then be required to make three trial payments.  The three trial payments will be listed in the letter.  After successfully paying the three trial payments, the modification will become permanent.  No documentation and no hardship will be required.

Borrowers who receive a Streamlined Modification will still have the option of submitting the fully documented HAMP application with a hardship letter and, if they qualify, can have the Streamlined Modification reduced to the HAMP payments and terms.

Fannie Mae and Freddie Mac services are required to start sending out Streamlined Modification Solicitation Letters to borrowers who are eligible beginning July 1, 2013.

See the Fannie Mae Servicing Guide Announcement SVC-2013-05 and Freddie Mac Bulletin Number 2013-5 for more information.

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