The New Plan to Keep People in Their Homes
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THE BASICS
Who is participating: Fannie Mae, Freddie Mac and many major lenders and mortgage servicers, effective Dec. 15. The servicer is the company to which you send your payments.
Who is eligible: If the property is a single-family residence in which you live and you're 90 or more days past due on your payments or in foreclosure, you are eligible. You cannot be in bankruptcy.
Equity requirement: Your loan-to-value ratio must be 90 percent or more -- that is, your equity must be 10 percent or less, as determined by Fannie Mae, Freddie Mac or the mortgage servicer (depending on your lender).
The paperwork: You must complete a hardship statement and provide verification of your household monthly gross income, and a signed modification agreement.
If you're not eligible: Many major lenders offer their own modification programs. For example, Citigroup does not require that you be behind on payments.
HOW IT WORKS
1. Check your eligibility.
2. Call your mortgage servicer with:
A. Your loan number.
B. Your monthly gross household income.
C. An estimate of your homeowners association or condo fees.
Your servicer will tell you whether a participating investor owns your loan, your property value and whether you meet the loan-to-value requirement
3. Your servicer will try to find a combination of options that reduces your payment to no more than 38 percent of your gross income. These options include:
A. Extending the loan term.
B. Lowering the interest rate.
C. Pushing back payments on the principal.
4. Submit your paperwork and your first payment.
5. Make three payments within 90 days to lock in the reduction.
Call: Hope Now (888-995-HOPE) or your servicer.
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