Fannie’s Streamlined Mod Option Helps 11K Borrowers Since July

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More than 11,000 borrowers are currently in the midst of trial mortgage loan modifications through Fannie Mae’s Streamlined Modification program, which officially rolled out at the start of July, and an additional 30,000 borrowers pre-qualified for the program prior to July, according to a blog post last week by Bill Cleary, VP of credit portfolio strategies at Fannie Mae.

After discovering that many homeowners felt the application and documentation processes for loan modifications were “overly complex,” Fannie developed the Streamlined Modification program to help modify delinquent loans quickly without making borrowers jump through too many hurdles.

“Despite our efforts to collect documentation and provide modifications, we found that a significant portion of our loans that became 90 days delinquent were still ending up in foreclosure,” Cleary said.

“Our research showed that providing income documentation was a significant barrier to getting a homeowner into a foreclosure prevention alternative,” he added.

Not only did borrowers struggle with income verification, but a survey of modification applicants found that while more than half of respondents believed they had completed and submitted all required documents, servicers determined only about 5 percent had.

The new streamlined program allows any homeowner 90 or more days delinquent on his/her first-lien mortgage to receive a trial loan modification if his/her loan-to-value ratio is 80 percent or higher. Borrowers do not have to submit income verification, proof of financial hardship, or other documentation to qualify.

To read the complete article please use the link below.

Streamlined Mod 

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