New program helps Pinellas homeowner stay out of foreclosure - WFLA News Channel 8

New program helps Pinellas homeowner stay out of foreclosure

Posted: Updated:
PALM HARBOR, FL (WFLA) -

Fannie Mae and Freddie Mac are launching a new "simplified" loan modification program.

This is good news for some troubled homeowners who have long complained that mortgage companies reject their applications for loan modifications or lose their paperwork.

This new program, unlike others, will not require homeowners to submit financial information. Borrowers only need to be at least 90 days late on a Fannie Mae or Freddie Mac guaranteed loan. More than half of loans in the U.S. are Fannie or Freddie loans.

The program will allow mortgage payments to be lowered by about 30 percent, according to Freddie Mac. Interest rates would be lowered to rates close to the current average.  This means many would also qualify for principal reductions.

Once accepted, homeowners need only make three on-time payments at the new rate before the new payments become permanent.

The program launches July 1 and expires Aug. 1 2015. Although applicants have to be only 90 days late to qualify, they can't be more than 24 months delinquent. This program is for the primary mortgage only; second mortgages would not be affected.

Palm Harbor homeowner Phillip Weissberg is thankful for the program because he's already been turned down for three other modifications.

"Most of the time, these are stiff-neck people who say, "You can't make the payments, then get out, we're going to take the home," Weissberg said.

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