New program to help some struggling homeowners avoid foreclosure

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DENVER -- In Late March, the Federal Housing Finance Agency announced Fannie Mae and Freddie Mac will offer struggling homeowners an easier way to stay in their homes.

The program, known as the Streamlined Modification Program, will take effect July 1, and homeowner advocates say it will change the way loan modifications are done.

Julie Maeda of The Haven Group says Fannie and Freddie are the largest investors of loans these days, “So if you’re a struggling homeowner and you’ve fallen behind, then this can be really advantageous to you.”

Maeda, who helps people facing foreclosure on a daily basis, says foreclosure is never an option because, “There are way more options out there than foreclosure.” Maeda says this program is one of them.

In order to qualify, your loan must be owned or guaranteed by Fannie Mae or Freddie Mac.

Homeowners must be 90 days to 24 months late, and have a first-lien mortgage that is at least 12 months old. Also, the loan-to-value ratio must also be at least 80 percent. Meantime, loans that have been modified at least twice previously are not eligible.

If you meet those requirements, you will make trial payments for three months.

The estimated trial payment is about 31% of your monthly income before taxes, with a new interest rate at 4%.

The FHFA estimates average monthly savings to homeowners at about 30%, but that’s only if you successfully make all three trial payments on time.

The program is set to expire in 2015, and even though it doesn’t officially start until July, Julie Maeda encourages you to stay proactive, and don’t wait.

These links will help you figure out if your loan is owned by Fannie Mae or Freddie Mac.

Fannie Mae: http://www.knowyouroptions.com/
Freddie Mac: https://ww3.freddiemac.com/corporate/?intcmp=LLT-HPimage