Should You Get a Home Loan Modification?
What is the Flex Modification Program?
If you are having trouble paying your mortgage due to any financial difficulties then the newly launched Flex Modification Program by Fannie Mae and Freddie Mac can not only help you save your home from foreclosure, but it can also lower your mortgage payments with the help of our team of legal professionals backed by seasoned attorneys.
After the 2008 economic collapse, the government introduced the Home Affordable Modification Program (HAMP) to help the homeowners who, for the most part, was enduring some type of hardship (due to the economy) and had trouble paying their mortgage each month. However, HAMP stopped taking applications at the end of 2016, therefore Freddie Mac and Fannie Mae (the government organizations created by Congress to provide stability and affordability to the mortgage market) introduced a better alternative known as the Flex Modification Program. This program took effect starting October 1, 2017, and it basically lets the lender agree to change the borrower’s loan terms to lower the monthly payment to a more affordable amount.
How It Works
Borrowers who are less than 90 days delinquent on their mortgage payments can complete a loss mitigation application that can reduce their monthly mortgage payments by 20% and a 40% housing expense-to-income ratio. On the other hand, borrowers who are 90 or more days delinquent are not required to provide any borrower documentation to get 20% reduced from their monthly mortgage payments.
The 20% reduction in your mortgage payments can be achieved through a combination of changes such as:
- Lowering your mortgage interest rate
- Extending your loan term
- Capitalizing overdue amounts (adding to the total outstanding loan amount)
- Setting aside part of the principal loan into a balloon payment amount before calculating monthly payment thus reducing your monthly mortgage payments, also known as Principal Forbearance.
Some of the Primary Requirements to be Eligible*
To be eligible for the Flex Modification Program the following must apply:
- The loan must be a conventional first mortgage
- Have a mortgage owned by Fannie Mae or Freddie Mac. (most mortgages are Fannie/Freddie owned)
- Submit a BRP (Borrower Response Package).
- Prove your hardship.
To help you determine your ultimate eligibility our team of legal professionals can help you navigate the rather extensive requirements and mortgage servicer requirements.
*PLEASE NOTE: If you’re 90 or more days in default, then some or all of these qualifications may disappear.
Other Alternatives to Foreclosure:
The Flex Loan Modification program is only one of many ways an experienced Law Firm can help you avoid foreclosure among others such as Repayment Plans, Deed in Lieu of Foreclosure, Refinancing, Bankruptcy, Short Sale etc. Depending on whether one has in the past used these or other modification type programs eligibility may vary and requires careful consideration to ensure the best outcome.
Our experienced attorneys at Consumer Law Attorneys can help you determine whether the Flex Modification Program is the best option for you. Call us at 877-241-2200 today for a free review of your current financial situation.