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Out With HAMP, in With Flex Modification

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Just before the HAMP program came to a close, Fannie Mae and Freddie Mac introduced a new method for borrowers who have fallen behind on payments to seek respite. The Flex Modification Program provides a 20 percent reduction on mortgage payments, in hopes that debtors will then be able to catch up.

About the Program

Flex Modification can be utilized by all mortgagers beginning October 1, 2017. In the meantime, loan servicers will still be required to utilize Fannie and Freddie’s current standards to make decisions concerning delinquent borrowers. The program aims to allow people struggling with debt to remain in their homes while seeking out a solution. Borrowers must be more than 60 days delinquent to qualify, with the exception of some special cases. According to the loan servicers, Flex Modification will benefit more than just mortgagers. Every foreclosure pulls from government funds, whether simply for administrative tasks, as a result of property taxes that have gone unpaid, or due to city intervention on an abandoned property. Therefore, both lenders and taxpayers are set to save money if foreclosure rates fall as a result of the efforts. Not to mention, homeowners benefit if a nearby house is saved from foreclosure, since their own home’s value will not be negatively impacted by the occurrence.

Flex Modification vs HAMP

The biggest difference between Flex Modification and HAMP is that borrowers will no longer be eligible for incentive payments. On the other hand, the incentives servicers will receive for completing Flex Modifications efficiently aren’t quite as high as with HAMP. For loans that are less than 120 days delinquent, lenders will receive $1,600, as opposed to HAMP’s $2,100. Loans that fall within 121 and 210 days late on their payment will be afforded $1,200, rather than HAMP’s $1,700. Finally, all loans that are more than 210 days delinquent are eligible for a $400 incentive fee, whereas HAMO provided $900.

If you’re falling behind on mortgage payments, there are various alternatives to foreclosure that can be explored with the help of a Miami foreclosure defense attorney. Call our office today to get back on track.

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