For seriously delinquent, underwater homeowners struggling through the murky aftermath of the financial crisis, help is on the way in the form of a gift from the Federal Housing Finance Agency. Fannie Mae and Freddie Mac will soon be required to offer principal reduction to certain seriously delinquent, underwater borrowers that are grappling with the after effects of the crisis.
The new offering, or the Principal Reduction Modification program, is designed to help struggling homeowners avoid foreclosure and stay in their homes, the FHFA stated. The modification program was approved under FHFA’s statutory authority in the Emergency Economic Stabilization Act of 2008 to quote implement a plan that seeks to maximize assistance for homeowners and minimize foreclosures close quote.
Investors with property loans issued before the housing crisis continue to see fewer defaults than those for owner-occupied properties, according to a report from Moody’s Investors Service. The credit ratings agency released research Tuesday that suggested the rates would persist well into 2017.