The government’s mortgage financing organizations, Freddie Mac and Fannie Mae, have long insisted that their popular Home Affordable Mortgage Program (HAMP) will expire at the end of the year, and they reiterated those plans at the weekend. However, that doesn’t mean there will be no more help for hard-up borrowers who’re struggling to pay for their homes.
The two bodies have just announced a new foreclosure prevention program to replace HAMP, which is set to be introduced sometime next year.
Freddie Mac and Fannie Mae said the new program will be called “Flex Modification”, and will provide eligible homeowners with a 20 percent reduction on their mortgage repayments. The rules of the new program indicate that the majority of homeowners who’re 60 days or more past due on their repayments should be able to qualify, though there may also be some exceptions available to borrowers who’re current or less than 60 days delinquent, if they meet other criteria.
“The new Flex Modification announced by Fannie Mae and Freddie Mac was designed based on lessons learned from crisis-era modification programs to help borrowers stay in their homes and avoid foreclosure whenever possible” said Sandra Thompson, the Federal Housing Finance Agency’s deputy director. “By avoiding the high costs associated with foreclosures, the Flex Modification will result in significant savings for the GSEs and taxpayers. And it will provide borrowers who face permanent hardships with a sustainable modification."
Freddie Mac and Fannie Mae’s new program will be implemented by Oct. 1, 2017.