This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

No-Doc Mortgage Mods From Fannie, Freddie

NEW YORK ( TheStreet) -- Fannie Mae (FNMA) and Freddie Mac will begin offering a simpler loan modification initiative to help troubled borrowers avoid foreclosure, the Federal Housing Finance Agency(FHFA) said on Wednesday.

Beginning July 1, servicers will be required to offer borrowers who are behind on their payments by 90 days or more an easy way to lower their monthly payments without requiring financial or hardship documentation.

Borrowers will only have to show willingness to pay by making three on-time trial payments, after which the mortgage will be permanently modified. Documenting income and financial hardship, however, could result in additional savings for the borrower, the FHFA said.

While executives at the agencies said the initiative will cut through the paperwork and ease the process, Fannie Mae Senior Vice President Leslie Peeler also warned that "all homeowners must know that we will be using all the tools available to us to screen for potential strategic defaulters."

Fannie Mae's guidance letter to servicers also points to plenty of exclusions when it comes to borrower eligibility.

Borrowers will have to be no more than 720 days delinquent. Modifications will be available only on first-lien mortgages and only on those mortgages with a loan-to-value ratio of 80% or more.

Those whose mortgage was modified two or more times previously will not qualify. Borrowers with mortgages less than 12 months old will also not be eligible for the initative.

For the complete list of eligibility requirements for Fannie Mae, click here. For more on Freddie Mac's guidance, click here.

The program is available to borrowers with loans owned or guaranteed by Fannie Mae and Freddie Mac. The program expires August 1, 2015.

Fannie Mae and Freddie Mac have modified 1.3 million loans since being placed into conservatorship in 2008.

-- Written by Shanthi Bharatwaj New York.

>Contact by Email.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FMCC $1.57 -0.70%
FNMA $1.71 0.00%
AAPL $95.03 -2.90%
FB $116.73 7.20%
GOOG $691.20 -2.10%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs