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Florida homeowners may soon access new loan modification program

Homeowners in Florida and across the country have the option to modify their loans and take advantage of lower interest rates, but the process has been fraught with paperwork and technical requirements. For those holding relatively high-rate mortgages, the “Streamlined Modification Initiative” is set to simplify the process for owners with 90 days or more of delinquent payments. Some restrictions still apply, and the best source of information on eligibility is the servicer of the loan.

The initiative was passed by the Federal Finance Housing Agency (FFHA) and will take effect on the first of July. All loan modifications under it will be handled by the agency’s Freddie Mac and Fannie Mae lenders. Documentation is not required, but it may increase eligibility for more savings for those facing financial hardship. Historically, most lenders comply with (FFHA) actions by establishing similar programs, but lenders are not required to participate. A primary restriction on eligibility is that only first mortgages with less than 20 percent delinquency are eligible.

One real-estate lawyer cautions owners to beware of scams involving this initiative. Unsolicited offers of help to enter the program are unhelpful and likely scams. The lender is the primary source of information on this and other loan modification programs, and there is no need to pay a third-party for assistance.

Homeowners face loss of their home to foreclosure for many reasons often out of their control. Mounting debt and stagnant or lost income may threaten to take away a family’s primary investment. Any owner with delinquent mortgage payments may be able to loan modification or other options. If a lender fails to provide assistance, an attorney may still be able to help.

Source: Sun Sentinel, “Ask a real estate pro: Loan modifications to get easier,” Gary Singer, April 4, 2013

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