The Mortgage Crisis and Increasing Foreclosures -- Is there Hope on the Horizon? Part II
And, still, the foreclosures keep coming. It's nearly Christmas and while some lenders have put a moratorium on foreclosures till after the holidays, others keep plugging along. I am defending a client whose sale date is December 23, 2008. And, again, I am asking myself what is it going to take to help homeowners? Today I want to give a brief kudos to the government who may have taken a baby step in the right direction.
Fannie Mae provided information and guidelines to its servicers regarding the implementation of a streamlined modification program (SMP). The SMP is designed to be a streamlined process for modifying the loans of a large number of borrowers who are delinquent in their mortgage payment. This will hopefully fend off some foreclosures. It is also hoped that this program will set standards in the mortgage servicing industry for conducting loan modification programs on a large scale as a foreclosure prevention measure.
Under the program, borrowers who meet certain eligibility criteria and demonstrate financial hardship may be eligible for a loan modification that reduces their monthly principal and interest payment. The streamlined process sets a new monthly payment during a three-month trial period, and sets forth the modification terms that will take effect after the homeowner has made the three payments during the trial period. However, the program only applies to people who are 90+ days delinquent.
Like I said, it's a baby step. Let's see where it goes from here.
