After the burst of the housing bubble in 2005 and the mortgage crisis in 2008, mortgage modifications have been very popular. One of the most popular programs, HAMP (Home Affordable Modification Program) expired on December 31, 2016. The good news for homeowners is HAMP has been replaced with the new Flex Modification program in the hope that more homeowners will avoid foreclosure and will be able to remain in their homes.
The new Flex Modification combines the features HAMP, Standard Modification and Streamlined Modification. The process is expected to be easier and it is hoped it will help more borrowers qualify for a loan modification and avoid foreclosure.
The Flex Modification is designed to help borrowers in all stages of repayment. For borrowers that are less than 90 days delinquent, Flex Modification can reduce the payment by 20%. For borrowers that are more than 90 days delinquent, the program can reduce the payment by 20% and does not require borrower documentation. According to Fannie Mae, "The program will offer additional payment relief allowing forbearance of principal to an 80% mark-to-market loan-to-value ratio for eligible borrowers." This principal forbearance may not exceed 30% of the unpaid principal balance. For eligible borrowers, this can mean huge savings.
The first Flex Modifications may be submitted by the mortgage lenders as early as March 1, 2017. Additionally, all mortgage servicers must send a letter describing this program to borrowers no later than October 1, 2017.
The Law Office of Seymour & Associates, P.C.
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