Loan Mods Without the Paper

One of the reasons why some folks don't take advantage of the potential lifesaving device known as a loan modification as a method of avoiding foreclosure is that there is "so much paperwork" to get through. Well, in some cases, that issue may just have become a thing of the past. Yesterday, Fredie Mac and Fannie Mae announced a program that will allow loan mods by a fast track method not using paperwork. Not everyone will qualify, but for those with the following qualifications, they can take advantage of the program. The required pre-requisites are: the loan must be delinquent between 3 and 24 months; it must also be at least a year since it was made; must be guaranteed by either Freddie or Fannie;and must have a loan balance equal to at least 80% of the home's current value. Another unique set of features is that you do not have to verify employment or prove you have a hardship, both items most other loan mod programs do require. Borrowers also must start making the new payments. Once they have made three consecutive ones on time, they'll sign a document making the mod permanent. Prior missed payments will be added to the loan balance, the loan's term will stretch out to 40 years and the interest rate will be at Fannie or Freddie's standard mod rate, which changes regularly. But not to worry there either. Once your loan is agreed to the rate it starts it will be fixed for the life of the loan. The program begins July 1, 2013 and continues until August 1, 2015, and can even be used for rental or vacation properties one may own. There are a few other details, but check with Fannie or Freddie to get the full details and start your mod working as soon as the program begins. The agencies' websites are: www.freddiemac.com and www.fanniemae.com . As always, Good Luck.