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
TheStreet Open House

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.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7870 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs