Good news finally for desperate and frustrated borrowers stuck with unaffordable mortgage payments and uncooperative lenders.  Fannie Mae has announced their Streamlined Modification Program (SMP) is now available to Fannie Mae servicers and borrowers as an option to prevent foreclosure and keep borrowers in their homes.  This streamlined loan modification process is intended to help set standards in the mortgage servicing industry and be a model for other lenders who are designing and implementing loan modification programs.

Fannie Mae has been working with 27 lenders and servicers in the HOPE NOW alliance to implement this streamlined loan modification program.  Under the program, eligible borrowers would be given a loan modification that reduces their monthly mortgage payment for a three month trial period.  If the borrower makes those payments in a timely manner for three months, then the modification will become permanent.   The program is projected to help 10,000 borrowers get back on track each month.

The streamlined loan modification program will reduce the borrowers monthly mortgage payment, including taxes and insurance to an amount equal to 38% of the borrowers gross monthly income.  The changes to the loan terms may include:

1. Adding any accrued interest, escrow advances and costs to the principal balance
2. Extending the loan term
3. Reducing the interest rate in increments of .125%, to as low as 3%.  If the new rate is set below the market interest rate, it will step up in annual increments after 5 years.
4. Forbearance of a portion of the principal, which will deferred to a balloon payment due when the loan matures, is paid off, or is refinanced.

There are certain eligibility criteria which must be met to qualify for this streamlined loan modification program:

1. Conforming conventional and jumbo conforming mortgage loans originated on or before January 1, 2008
2. Borrowers not currently in bankruptcy
3. Only one-unit, owner-occupied, primary residences
4. Current mark-to-market loan-to-value rati of 90% or more

Homeowners will be receiving solicitation letters and it is critical that borrowers respond to these letters to determine if they are eligible for this loan modification program.  Homeowners who do not receive a letter can contact their lender or servicer to inquire about applying for the program.  It is very important for interested homeowners to understand who qualifies, how to complete their loan modification application paperwork properly, and how to submit their proposal so they have the best chance for loan modification approval.

You can get the help you need to understand this loan modification program by ordering and downloading The Complete Loan Modification Guide. This is a low cost, easy to read handbook that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly. The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender. Get started today on the path to secure home ownership, order and download The Complete Loan Modification Guide.

For more information about mortgage loan modification, please visit us at: http://www.myloanmodificationcenter.com