Freddie Mac Gives Immediate Green Light to Streamlined Modifications

Freddie Mac has opened applications for its new Streamlined Modification program, making it available to all eligible borrowers immediately, six weeks earlier than originally planned. The company said the early implementation was made to expedite financial relief for potentially thousands of distressed families.

Under the program, originally set to begin on July 1, servicers are required to send modification offers to borrowers who are at least 90 days, but no more than 720 days, delinquent on mortgages that are at least 12 months old and meet other eligibility criteria. Eligible borrowers are not required to submit documentation and the modification becomes permanent if the borrower makes on-time payments during the three month trial period.

Terms of the streamlined modification are the same as Freddie Mac's standard modification which allows servicers to reduce monthly payments by reducing interest rates, extending terms up to 40 years, and in some instances granting principal forbearance.    

In a press release announcing the date change Freddie Mac said servicers can extend offers for the program to eligible borrowers as soon as they are ready.  The change was made, Freddie Mac said, because it is "focused on adding momentum to the housing recovery by giving distressed borrowers more options to avoid foreclosure."

More information about the Streamlined Modification can be found at FreddieMac.com