Alert April 02, 2013

FHFA Releases Streamlined Loan Modification Program

The FHFA announced that Fannie Mae and Freddie Mac will offer a "simplified modification initiative"—the Streamlined Modification Program—that removes the requirement to provide documentation of financial or hardship from the modification process. Under this initiative, the mortgage loan must meet the eligibility requirements (e.g., more than 90 days delinquent and a first lien mortgage loan) and demonstrate a willingness and ability to pay by making three on-time payments. Upon such a showing, mortgage servicers must offer the borrower a permanent modification. Mortgage servicers are required to follow the requirements under the streamlined program by July 1, 2013. In conjunction with the announcement, both Fannie Mae and Freddie Mac released guidance to lenders on the program. The program expires in August 2015.