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New Policy Will Help Borrowers Avoid Foreclosure

Borrowers who are very delinquent on their loans will soon have a new option that will help them to avoid foreclosure.  The Streamlined Modification Initiative, introduced by the Federal Housing Finance Agency, will start on July 1 and allow Fannie Mae and Freddie Mac servicers to offer reduced payments to eligible borrowers without having to collect financial or hardship documents.  Borrowers between 90 days and 24 months late will have a three month trial period to test a new mortgage that involves a fixed-interest rate and a loan term of up to 40 years.  To be eligible, the loan must be owned and/or guaranteed by Fannie Mae or Freddie Mac, be a first mortgage that is at least 12 months old and have a loan-to-value of at least 80 percent.  The initiative will end August 1, 2015.  Read more