Just a quick note with some good news for financially strapped homeowners, for a change–
In the recent past, your lender wouldn’t talk to you about modifying the terms of your mortgage if you lost your job, or otherwise got to a place where making your mortgage payments was impossible, until you had already missed at least two, and usually three, payments.
By that time your credit was already shot, you had racked up heavy late fees and penalties, and you were probably in a hole too deep to get out of.
Fannie Mae, which owns or guarantees about 18 million mortgages, has recently changed its policy, and will allow borrowers to request “Early Workouts” if they are reasonably certain that changes in their income will cause them to miss loan payments. In fact, Fannie Mae is instructing the banks servicing the loans to make borrowers aware of this program.
Borrowers who qualify will enter into a trial period, usually for four months, where they will be allowed to make a smaller payment as a result of whatever loan modification terms you and your lender can negotiate. If the borrower makes the payments as scheduled, and the income situation hasn’t been solved, the change will be made permanent.
Of course, it will be an annoying process with lots of rules and restrictions and red tape and proving that the need is real. It won’t work for everyone, but if you qualify, it just might prevent default and foreclosure and loss of your home and ruining of your credit.
Your lender will have more information and details. Ask about “Early Workout Loan Modifications.” You can also check out http://www.fanniemae.com/newsreleases/2008/4547.jhtml for a summary of the program.
If you have more information or experience with this program, please speak up and let me know!
Bye for now.
Scott
{ 1 comment… read it below or add one }
Finally some common sense from the government. actually try to help people before they are days away from losing their house!!! Thanks for the info.
Mark