As the recession hit, many homeowners had no choice but to seek help from their lenders. One source of help for many in Florida was a loan modification. A loan modification under the Home Affordable Initiative in 2009 helped many people obtain new payment amounts that were much more affordable. However, those were not permanent changes, and many fear what may occur as new rates go into effect and payments again rise to amounts that may be unmanageable.
Lenders do not want to see homeowners struggle to pay. As a way to deal with the possibility of putting homeowners back in a challenging position of financial uncertainty, Freddie Mac has decided to modify some mortgages again. The move to re-modify for some will help those homeowners avoid defaulting again.
According to previous loan modification standards, the monthly principal and interest would be set at 31 percent of the income of the borrowers. That amount would be set for five years then rise slowly each year. It would eventually reach a rate that matches the rate when the loan took effect. This summer, the service providers will evaluate where some people stand and plan to restructure some loan modifications to prevent another financial hardship for the homeowners.
For some, being granted a loan modification was the only way they kept a home. As the rates fluctuate and payments rise, some Florida homeowners may find themselves in need of help once again. While qualifying for another loan modification may be one option, homeowners should be aware of other options as well, such as bankruptcy protection.
Source: nasdaq.com, “Freddie Mac And Fannie Mae To Alter Some Loan Modifications“, March 17, 2015