The Federal Housing Finance Agency’s Home Affordable Modification Program (HAMP)
has been a loss mitigation option available to defaulted Borrowers since 2009. Initially
scheduled to sunset in December of 2013, HAMP was extended until December 31,
2016. Fannie Mae and Freddie Mac consolidated three modification programs,
Standard Modification, Streamlined Modification and HAMP, into the Fannie Mae
Flex Modification program.
Servicers may begin to submit cases for Flex Modification consideration to Fannie Mae
and Freddie Mac as early as March 1, 2017 with mandatory implementation effective
October 1, 2017. In the interim, cases can still be considered for both Standard and
Streamlined Modifications. There will be a two-month gap between HAMP’s official
sunset and the availability of a similar loss mitigation option.
There are a few preliminary notable differences between HAMP and the Flex
Modification program. The Flex Modification program offers broader eligibility
Properties that are vacant or condemned are eligible for the Flex Modification but would
not have been eligible for HAMP.
Another significant difference between the programs is the monthly repayment term.
Under the Flex Modification guidelines, the monthly repayment term for the new
mortgage will be set at no more than forty percent of the borrower’s monthly income,
which is higher than the thirty-one percent permitted under the HAMP guidelines.
As the new program is implemented and Borrowers are considered for eligibility we are
certain more differences will become apparent.
The Federal Housing Finance Agency’s Home Affordable Refinance Program (HARP)
was also set to sunset on December 31, 2016, but the program has been extended to
September 30, 2017. Additional options are anticipated beginning in October 2017.
To discuss the Flex Modification program in greater detail, please contact us.
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