March 27, 2013
Rep. Mike Capuano today praised the Federal Housing Finance Agency (FHFA) for taking additional steps to help homeowners who are struggling to keep current on their mortgages with its new Streamlined Modification Initiative. This program applies to loans owned or guaranteed by either Fannie Mae or Freddie Mac. Homeowners who are at least 90 days behind on their mortgage will automatically be given the opportunity to modify their loan. Homeowners will be sent a trial loan modification plan with a new monthly payment and an interest rate of 4%. Payment terms for the loan will be extended to 40 years. If the borrower makes three on time monthly payments at the new rate, then the modification becomes permanent. If they miss a payment during the trial period, the new terms are invalidated.
“This is a straightforward way to help many homeowners who are struggling to meet their mortgage obligations. It provides quicker access to modifications with fewer administrative burdens. I understand that some homeowners are simply too far behind to avoid foreclosure. However, there are many homeowners who just need a little help to stabilize their mortgages. I have long argued for programs targeting people who cannot qualify for refinancing but who still have the capacity to pay their mortgage under adjusted terms so they can keep their homes.”
Alison M. Mills (Rep. Capuano) 617-621-6208