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New application introduced to simplify loan modification process

After the mortgage crisis that affected many Florida residents and others around the nation, several mortgage assistance programs arose. However, many of these programs were cumbersome and complicated. The Federal Housing Finance Agency recently introduced a new program that is promised to simplify the loan modification process for consumers.

The goal of the new process is to make it easier to navigate. The agency partnered with Fannie Mae and Freddie Mac to design the new Mortgage Assistance Application. It was created after the housing crisis to address several principles in the loss mitigation process, including accountability, affordability and accessibility.

Several changes were made to the application, such as making the form cleaner and adding questions to better understand consumers' needs. Also, the application can be filled out and submitted before a loan is delinquent for 90 days. After the application is received, a servicer can begin to evaluate options for the homeowner.

Servicers may be able to recommend a loan modification, short sale or deed-in-lieu of foreclosure. Other options include a forbearance plan or repayment plan. Another change to the application is the reduction in the amount of documentation required that shows someone's financial situation. The changes, which must be implanted by June 1, 2018, will benefit both mortgage services and consumers.

A loan modification is a helpful answer for many Florida homeowners in financial distress. To determine if it is the right course of action or if another solution is better, it would be wise to consult a Florida bankruptcy attorney. An experienced lawyer can evaluate each situation and recommend a plan that will help clients gain control of their financial situation.

Source: dsnews.com, "Helping the Homeowner Resolve Mortgage Delinquency", Nicole Casperson, Nov. 5, 2017

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