Broadcast/Web Reporter- Washington Business Journal
No-document financing is back in the mortgage business, this time aimed at helping homeowners who are struggling to make their payments.
Called the Streamlined Modification initiative, borrowers who are at least 90 days delinquent on mortgages that are at least one year old are not required to submit documentation when accepting a loan modification offer from Fannie or Freddie to lower their monthly payments.
If the borrower makes the payments on time during a three-month trial period, the modification becomes permanent.
“We will still encourage such borrowers to provide documentation to support other modification options that would likely result in additional borrower savings,” FHFA acting director Edward DeMarco said.
The Streamlined Modification Initiative starts July 1 and runs through Aug. 1, 2015.
Jeff Clabaugh covers general assignment and provides business coverage for WTOP.