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July 02, 2013

FHFA expands loan modification initiative

July 3, 2013 – The Federal Housing Finance Agency launched streamlined loan modification initiatives through Fannie Mae and Freddie Mac on Monday in its effort to help eligible delinquent borrowers lower their monthly payments and avoid foreclosure.

If a borrower is at least 90 days late on a mortgage payment, servicers must offer lower monthly payment requirements through the Streamlined Modification Initiative without asking the borrower for financial or hardship documentation.

The FHFA announcement specified: "Eligible borrowers must demonstrate a willingness and ability to pay by making three on-time trial payments, after which the mortgage will be permanently modified . . . Documenting income and financial hardship could result in a modification with additional savings for the borrower."

The Streamlined Modification Initiative will expire on Aug. 1, 2015.