Fannie Mae and Freddie Mac are introducing a jointly developed new mortgage loan modification at the direction of the Federal Housing Finance Agency, which has been named the Flex Modification.

The Flex Modification combines features of the Home Affordable Mortgage Program (“HAMP”), Standard Modification and Streamlined Modification. The Flex Modification can be applied to all mortgage loan delinquencies, as well as to mortgage loans that are determined to be in imminent default in accordance with Fannie Mae and Freddie Mac’s Servicing Guides.

Servicers are encouraged to implement the Flex Modification policies as early as March 1, 2017; however, servicers must begin evaluating borrowers for the Flex Modification no later than October 1, 2017. Once implemented, servicers must offer the Flex Modification to all eligible borrowers and no longer evaluate borrowers for a Standard or Streamlined Modification.

Borrowers with mortgage loans less than ninety (90) days delinquent must submit a complete loss mitigation application, and will be evaluated for a Flex Modification which will target a 20% payment reduction and a 40% housing expense-to-income ratio.

Borrowers with mortgage loans ninety (90) or more days delinquent are not required to submit a complete loss mitigation application, and will be evaluated for a Flex Modification which will target a 20% payment reduction.

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Although you may attempt to negotiate for a loan modification yourself, there are significant benefits to working with a law firm that is experienced in this area. If you have any questions concerning the Flex Modification program or loan modifications in general, please contact our office at 973-323-2953 .