Programs That Modify Mortgage Loans
(5 of 7)
Programs That Modify Mortgage Loans
Many programs have sprung up over the years to help distressed homeowners who are having problems with their mortgages. Some of them last only a certain number of years, while others last longer. Some rework themselves as needed. Most of these programs are administered through the US Department of Treasury, the Department of Housing and Urban Development (HUD), and/or the Federal Housing Administration. Others are run by the lender who is servicing a given loan and are unrelated to federal or state programs.
Homeowners in financial distress have several federal options:
Homeowner Assistance Fund (HAF)
HAF provides grants through state programs to help homeowners catch up on mortgage payments, property taxes, and other housing costs.
Fannie Mae Flex Modification Program
This program offers loan modifications for borrowers with Fannie Mae-backed mortgages to reduce monthly payments and avoid foreclosure.
Freddie Mac Flex Modification Program
Similar to Fannie Mae’s program, this one helps Freddie Mac borrowers by adjusting loan terms to make payments more affordable.
FHA Loss Mitigation Program (HUD)
For FHA-insured mortgages, available options include repayment plans, forbearance, partial claims, and loan modifications.
VA Loan Assistance & VA Servicing Purchase (VASP)
For veterans with VA-guaranteed loans, the VA provides repayment plans, forbearance, and modifications. VASP allows the VA to purchase defaulted loans and extend terms up to 40 years.
USDA Borrower Assistance
For rural homeowners under US Department of Agriculture (USDA) programs, options include payment assistance subsidies, delinquency workouts, and moratoriums.
FHFA/GSE Loss Mitigation Options
Fannie Mae and Freddie Mac also offer repayment plans, forbearance, and disaster relief under FHFA oversight. FHFA stands for Federal Housing Finance Agency, an agency that works with and regulates Fannie Mae and Freddie Mac. GSE stands for government-sponsored enterprise that supports both Fannie Mae and Freddie Mac.
HECM (Reverse Mortgage) Default Remedies
FHA’s reverse mortgage program provides counseling and options like repayment plans and short sales for seniors in default.
Each program has its own eligibility requirements and other rules.