Freddie Mac announced the immediate availability of its streamlined modification program for delinquent borrowers on Monday, pushing up the roll out from its originally scheduled launch date of July 1.
The announcement extends the GSE’s decision to make the streamlined mods immediately available to all Hurricane Sandy victims and gives servicers the green light to send modification offers to borrowers who are least 90 days – but no more than 720 days – delinquent on a Freddie guaranteed or owned mortgage.
Loans also must be at least 12 months old and satisfy all eligibility criteria.
Borrowers who are qualified do not have to submit documentation for a streamlined modification. The mod takes effect permanently after the borrower proves his or her ability to make three on-time payments during a three-month trial period.
The streamlined modification offers the same mortgage terms as Freddie’s standard modification—an initiative that allows servicers to cut back on monthly mortgage payments by shifting interest rates, extending payment terms to 40 years and offering principal forbearances.
"Today, Freddie Mac is giving a green light to its mortgage servicers to speed up financial relief for potentially thousands of families with delinquent mortgages across the nation," Freddie said in a statement.
"Now mortgage servicers can send eligible borrowers their Streamlined Modification trial period terms as soon as they are ready and borrowers can modify their loans by making the three trial period payments on time. No borrower documentation is needed. Freddie Mac is focused on adding momentum to the housing recovery by giving distressed borrowers more options to avoid foreclosure."