On Nov. 11, the HOPE NOW Alliance, Fannie Mae, Freddie Mac, the Federal Housing Finance Agency and HUD announced the Streamlined Modification Program.

The new program introduces a consistent set of rules mortgage servicers can voluntarily use to more easily modify loans for at-risk customers in whatever combination needed to make their mortgage loans affordable.

To qualify for the program, homeowners must:

• be 90 days or more past due on their loans ( *** )

• occupy their single-family homes,
|
• not be in bankruptcy, and

• have loan-to-value ratios greater than 90% ( This means the value of the loan will be 90% of the appraised market value of your home )

For qualified homeowners, servicers may lower their mortgage payments by exploring a combination of measures to achieve a 38% debt-to-income (DTI) ratio.

Debt-to-Income Ratio is calculated by adding all the minimum monthly payments of your current debt ( including mortgage, taxes and insurance ) and divide it by your monthly gross income.

Servicers will notify customers who are likely eligible and ask them to:

1 ) call

2 ) provide proof of income ( W-2s or Tax Returns )

3 ) send a signed hardship letter that demonstrates a change in their financial situation, and

4) send a signed affidavit confirming that their default was not knowingly caused.

Then, the following measures may be taken by the servicer (in various combinations), stopping at the point the customer reaches 38% DTI:

• Extend the loan term to 40 years and reduce the interest rate (until the floor reaches 3%).

• If further reduction is required to achieve a 38% DTI, considering mortgage debt only, a portion of the loan principal will be set aside. No interest will be attached to this portion; the customer will simply have to make a balloon payment when the loan is paid off. This is Permitted if the new principal balance is not less than the current value of the property.

• Homeowners must demonstrate an ability to make new payments for three months before the modification is official.

For recent news and more information on these program please register on FACEBOOK and look for Hope for Homeowners Group.

(***) Is it fair that to qualify for the program, homeowners must be 90 days or more past due on their loan ???

What ever happen to the concept of honoring all your financial commitments so you can access to the best line of credit, best financing terms and all other opportunities by maintaining a ” Perfect Credit Score ”

What about those people who ARE NOT LATE ON THEIR PAYMENTS and work very hard to keep their financial commitments in good standing but are as well affected by current economic circumstances ? What are their REWARDS for their RESPONSIBLE, LOYAL and never late payment ?

Why can’t this candidates also opt for some kind of loan restructuring if they can proof that they really needed as the overextend themselves to meet their financial commitments ?

PLEASE … PLEASE … COMMENT