HispanicBusiness

QUESTION: I heard about a new program in which mortgage companies Fannie Mae and Freddie Mac will do loan modifications without all of the paperwork and red tape. Is this true or just another one of those wacky Internet rumors?

-- Carrie

ANSWER: Believe it. The Federal Housing Finance Agency, which controls Fannie and Freddie, recently announced new options for distressed homeowners. The Streamlined Modification Initiative, which begins July 1, will allow certain borrowers who are 90 or more days late with their mortgage payments to receive loan modification offers without submitting any documentation.

The homeowner then would need to make on-time payments for three months for the modification to become permanent. Borrowers can submit hardship documentation for an opportunity to receive additional savings. But just being delinquent on your mortgage payments won't guarantee a loan modification. Among other restrictions, the program only will be available for first mortgages that are no more than 20 percent "underwater." As with all loan modifications, interested borrowers need to contact their existing loan servicers to see if they are eligible.

While the program certainly is good news for struggling homeowners, you must be careful to avoid scammers trying to take advantage. Be wary of unsolicited modification offers you may receive in the mail. Deal only with your lender, and do not pay anyone to get you into this program. While not all loans will be eligible for this relief, most lenders seem to follow Fannie and Freddie's lead. I expect other lenders will follow suit with similar programs of their own.

___

ABOUT THE WRITER:

Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program.

The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.

___

(c)2013 Sun Sentinel (Fort Lauderdale, Fla.)

Distributed by MCT Information Services