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Fannie Mae Extends Alternative Modification Program

The latest in a string of government extensions is an extension to Fannie Mae's Alternative Modification (Alt Mod) to the Home Affordable Modification Program (HAMP).


The extension is being provided so servicers will have enough time to complete the processing of modifications for borrowers who meet the eligibility requirements for the Alt Mod program, which remain the same.

In Lender Letter LL-2010-04, Fannie Mae introduced the Alt Mod program for borrowers who were eligible for and


accepted into a HAMP trial period, and made all trial payments, but were not offered a permanent modification because of eligibility restrictions.

Fannie Mae requires that servicers consider the Alt Mod program for any eligible borrower before proceeding with foreclosure.

In addition to HAMP evaluation and fulfillment of trial payments, borrowers must meet one of the following requirements to be considered eligible:

* The monthly average mortgage payment ratio based on verified income was less than 31 percent.

* The target monthly mortgage payment ratio of 31 percent based on verified income could not be reached using the standard HAMP modification waterfall.

* The borrower failed to provide all income documentation required for a HAMP modification but meets the streamlined income documentation requirements outlined by Fannie.

The extension was announced September 30 and will allow servicers until November 30, 2010 to submit their Alt Mod cases.

About Author: Joy Leopold


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