Alternative HAMP Modifications By Fannie Mae
Although the number of loan modifications increased in January 2010, the bitter truth is that some homeowners won’t qualify for long-term relief even after successfully making their trial payments.
This change can be due to insufficient documentation during the final application process or because once their income is verified, their debt-to-income ratio pushed them out of the qualifying bracket.
But these unfortunate homeowners may have another option offered to them.
Fannie Mae is instituting the “Alternative Modification” (Alt Mod) and requiring all its servicers to re-evaluate all borrowers for the new solution before proceeding with foreclosure.
In a letter to lenders, Fannie explained that the Alt Mod is “an alternative to the HAMP modification for those borrowers who were eligible for and accepted into a HAMP trial period plan but were subsequently not offered a permanent HAMP modification because of eligibility restrictions.”