HAMP Out And New Foreclosure Prevention Program In

HAMP Out And New Foreclosure Prevention Program In

HAMP out and new foreclosure prevention program in

WASHINGTON – Dec. 15, 2016 – Freddie Mac announced that the Freddie Mac Flex Modification foreclosure prevention program will replace the Home Affordable Modification Program (HAMP) that expires at the end of this year. Both programs were designed to help at-risk families reduce their monthly mortgage payments.

Freddie developed the new program in alignment with Fannie Mae at the direction of the Federal Housing Finance Agency (FHFA).

According to Freddie Mac, it developed Flex Modification after getting input from a wide range of industry participants, and it learned lessons from earlier variations of the program.

Overall, Flex Modification should give at-risk eligible borrowers a way to reduce their monthly mortgage payment by 20 percent, Freddie says, and a "high proportion" of homeowners who are at least 60 days delinquent would be eligible. Homeowners who are current or less than 60 days delinquent could, in certain situations, also use the modification option.

In July 2016, the U.S. Department of the Treasury, in conjunction with the U.S. Department of Housing and Urban Development (HUD) and FHFA, released a white paper called "Guiding Principles for the Future of Loss Mitigation." That paper formed the basis for the new program and laid out five factors – accessibility, affordability, accountability, sustainability and transparency – that should form the foundation of future loss mitigation programs.

David Lowman, executive vice president of Freddie Mac's Single-Family Business, says that Freddie Mac believes the new program "strikes the appropriate balance between borrower relief and economic responsibility."

Servicers must implement the new program by Oct.1, 2017. In the interim, Freddie Mac's Standard and Streamlined Modifications will remain in effect until then. HAMP expires on Dec. 30, 2016.

© 2016 Florida Realtors®

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Phone: 561-951-3759
Dated: December 16th 2016
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