Fannie Mae and Freddie Mac announced a new loan modification plan this week to try to keep some struggling homeowners in their homes.
To qualify for this new plan -- which supplements modification plans already in place -- the homeowner must:
* be able to afford the mortgage accept for a recent financial hardship
* have a mortgage made on or before January 1, 2008
* be at least 90 days behind on payments
* be escrowing taxes and insurance
Loan servicers will adjust the interest rate, extend the term of the loan or forebear principal payments to create a new payment equal to 38% of the mortgagees gross pay. After three payments have been made on time the modification becomes permanent.
If you're having trouble with your loan, take a very close look at your living expenses and review all your options including selling the house as well as loan modification. Call your servicing company to see what loan options are available. Be sure that you understand the modification they offer you. Some programs may take away your option to file bankrupzy.
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