April 19, 2016
In Case You Missed It: A Look at Recent National Housing Policy News
Posted by
Virginia Housing
Labels:
CFPB,
Fannie Mae,
FHFA,
foreclosure prevention,
Freddie Mac,
homeownership,
ICYMI,
National Housing News,
National Housing Policy
The Federal Housing Finance Agency (FHFA) announced a new program under which Fannie Mae and Freddie Mac will forgive certain borrowers' outstanding mortgage principal to help them stay in their homes. The new Principal Reduction Modification program marks the first time that FHFA has allowed Fannie Mae and Freddie Mac to offer struggling borrowers principal reductions. The scope of the program is limited. To be eligible, a borrower must occupy the home as a principal residence, have been at least 90 days delinquent on their mortgage payments as of March 1, have a remaining mortgage principal balance of $250,000 or less, and have a total outstanding mortgage balance that is at least 115 percent above the current value of their home. FHFA estimates that 33,000 Fannie Mae and Freddie Mac borrowers will be eligible for assistance through this initiative. In a fact sheet describing the program, FHFA argues that the program's narrowly tailored eligibility standards will allow Fannie Mae and Freddie Mac to help struggling borrowers without putting the firms at risk of substantial financial losses.
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