New “Flex Modification” Loan Modification Program Begins in October 2017
A new loan modification program, called the Flex Modification, will officially be available to homeowners beginning October 1, 2017. Some mortgage servicers have already been offering the Flex Modification.
This program supersedes the Home Affordable Modification Program that ended at the end of 2016, as well as the Standard Modification and Streamlined Modification programs.
The Flex Modification is available to homeowners whose mortgages are owner by Fannie Mae and Freddie Mac. This encompasses roughly 3 in every 5 mortgages, the majority of home loans.
The Flex Modification reduces payments to 40% or less of the homeowner’s monthly gross income through a combination of steps called the loan modification Waterfall. This includes reducing the interest rate, extending the mortgage term, and forbearing (but not forgiving) part of the principal balance. Arrears also will not be forgiven.
Despite reforms since the mortgage meltdown a few years ago, it is still expected that homeowners trying to modify their mortgages with the Flex Modification will encounter some of the same issues with lost documentation, wrongful denials, and other unfair business practices. Consumers in Massachusetts may have a remedy for these under the Consumer Protection Act, called Chapter 93A.
Culik Law is a Boston, Massachusetts consumer protection law firm. Our attorney have helped hundreds of Massachusetts homeowners with their mortgage problems. Contact us to see if we can help you.