Fannie Mae’s 2009 Revision to Their Loan Modification Efforts – allotment 2
This is the second in a three portion series of articles on Fannie Mae’s revised guidelines for loan modifications which they announced in April of 2009. portion 1 indicated that Fannie Mae’s main emphasis was to serve people facing foreclosure through the Making Home Affordable Modification program.
Fannie Mae does not automatically exclude people who are ineligible for a modification under the Making Home Affordable Modification Program as discussed in section 1 of this series. They have 2 other sets of guidelines for helping them. They glimpse at their specific case and decide if their financial hardship would be classified as temporary or long term. They then have specific guidelines for the type of wait on they can receive in either of these situations.
In this second portion of this series, we are going to explore at the type of serve Fannie Mae will offer people who have a temporary hardship.
A temporary financial hardship is short term. Something happened which prevented a person from making their mortgage payments. An example would be a person lost their job. They were out of work for one year. They were able to build their mortgage payments for the first seven months. However, they were not able to do any payment for the last five months. They have since found work. Their income is sufficient again for them to execute their regular monthly payment.
They don’t qualify for a loan modification under the Making Home Affordable Modification Program. However, they don’t have the money to pay the total they owe for the five mortgage payments they missed.
Fannie Mae has instructed their mortgage company to offer them a temporary hardship forbearance. This simply means that there will be a temporary suspension of their mortgage payment. This is followed by an device with the person to repay the five payments missed.
A person does not need to have missed any mortgage payments to qualify for a temporary hardship forbearance. However, in their case, their inability to acquire a mortgage payment has to be imminent.
If they have not missed a mortgage payment yet, this temporary hardship forbearance can be for 6 months. It can be extended to 12months. For the period to extend beyond 12 months Fannie Mae has to give written approval.
If the person has already missed making their mortgage payment, the temporary hardship forbearance can be for 12 months. If a longer period is critical, Fannie Mae has to give their written approval.
The temporary hardship forbearance is followed by an agreement by the person who was facing foreclosure to repay the total amount of the money owed. There are two different options here. The first is a temporary hardship repayment notion. The second is a HomeSaver Advance™.
With the repayment understanding the person has to repay the money owed in addition to making their regular monthly payment. If it is going to hold them longer than 6 months to repay what they owe, the mortgage company has to have a written agreement with the person.
If the person cannot repay the money owed within 9 months, the person has to employ a HomeSaver near. This is an unsecured loan for the fat amount owed by the person. The maximum size of the loan is the lesser of $15,000 or 15% of the unpaid famous balance on the mortgage.
The loan is for 15 years. During the first 6 months no interest is charged and no payment is required. The interest for the remaining 174 months is 5%. The person has to pay off the loan and to originate equal payments over those 174 months.
If the property is sold, the remaining balance on the HomeSaver near has to be paid off. If the mortgage is refinanced, it does not have to be paid off. The person can pay off the balance at any time during the 15 year period.
There is no cost to the person facing foreclosure for either the hardship repayment conception or the HomeSaver come.
Anyone with a Fannie Mae mortgage who is facing foreclosure and who is denied a loan modification under the Making Home Affordable Modification Program because their hardship is temporary should not give up. They should score out if they qualify for a temporary hardship forbearance and a repayment opinion or a HomeSaver reach. This may enable them to do their home.