Industry NewsMortgage

New plan seeks to streamline loan mods

Fannie, Freddie to lead the way

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A new plan to streamline loan modifications for homeowners who have fallen behind on their mortgage payments could help "hundreds of thousands" of borrowers avoid foreclosure. But the plan is far less ambitious than a competing proposal for the government to guarantee payments on as many 3 million loan modifications. With Fannie Mae, Freddie Mac and the HOPE NOW alliance of 27 loan servicers standing behind it, the new streamlined modification program rolled out today by the Bush administration is expected to provide thousands of delinquent borrowers another alternative to foreclosure. In the past, much of the administration's efforts have centered around loan refinancing programs guaranteed by the Federal Housing Administration. The new loan modification program is targeted at high-risk borrowers who have missed three or more mortgage payments on their primary residence but who have not filed for bankruptcy. The program is designed to get them current on their...