HAMP to Be Replaced with ‘Flex Modification’
Mortgage financing giants Freddie Mac and Fannie Mae announced a new foreclosure prevention program that will roll out next year to replace the Home Affordable Mortgage Program (HAMP), which expires at the end of this month.
The new program will be called “Flex Modification.” It reportedly will provide a 20 percent reduction in mortgage payments for eligible borrowers. The majority of those homeowners who can qualify will be 60 days or more past due on their payments, although the GSEs note that some exceptions may be granted to those who are current on their mortgages or less than 60 days delinquent in certain circumstances.
“The new Flex Modification announced by Fannie Mae and Freddie Mac was designed based on lessons learned from crisis-era modification programs to help borrowers stay in their homes and avoid foreclosure whenever possible” says Sandra Thompson, the Federal Housing Finance Agency’s deputy director. “By avoiding the high costs associated with foreclosures, the Flex Modification will result in significant savings for the GSEs and taxpayers. And it will provide borrowers who face permanent hardships with a sustainable modification.”
The new program will be implemented by Oct. 1, 2017.
Source: “‘Flex Modification’ Designed as New HAMP,” Mortgage News Daily (Dec. 15, 2016)