The Streamlined Modification Initiative
For the past few years the big banks have been making strides to improve their efficiency in modifying mortgages. Fannie Mae and Freddie Mac have introduced the Streamlined Modification Initiative to help improve the expediency which homeowners receive their loan modifications. The new process no longer requires proof of hardship and applies to more properties and homeowners than previous programs such as HAMP. The eligibility requirements are provided below.
- The borrower must be at least 90 days but no more than 720 days delinquent.
- The pre-modified mark-to-market loan-to-value (MTMLTV) ratio (gross unpaid principal balance of the current loan, including any principal forbearance as a result of a prior modification, divided by the property value obtained in accordance with Guide Section B65.16, Property Valuation Requirements) must be greater than or equal to 80 percent.
- The mortgage originated at least 1 year prior to the evaluation date for the modification.
- The principal and interest (P&I) payment must be less than or equal to the pre-modification principal and interest payment.
- The first mortgage is a conventional loan that is currently owned, guaranteed, or securitized by Fannie Mae or Freddie Mac.
- The borrower is not deemed ineligible based on the exclusions listed in Guide Section B65.12.1.
*All eligibility information is provided as guidance and does not guarantee qualification of the program.
Older programs such as HAMP are not going as planned. If you have a legitimate hardship you may still qualify for kinder terms under HAMP than the Streamlined Modification Initiative. While some homeowners may be upset by the relaxed guidelines, the FHFA believes it can filter out homeowners pursuing strategic default, how is another question. The program is currently set to expire in August of 2015. Call us here at Upside Down CA at 916.442.6400 to discuss your loan modification goals.