Have you heard about the new Fannie Mae Payment Reduction Plan? It is the latest payment forbearance program to come out for people having trouble making their house payment. Learn what you need to know in this article.
In a recent policy change Fannie Mae canceled a program called the HomeSaver Forebearance. The HomeSaver Forebearance program was designed to help people recover from a "speed bump" in life. It cut a homeowner's house payment by 50% for up to six months. The new Payment Reduction Plan is meant to replace this canceled program.
How does this program help me? If you are having a tough spell due to a job loss, illness, divorce or other temporary setback this program can help you get back on your feet. Under this program you can get the principle and interest portion of your house payment lowered by as much as 30% for up to six months. During this time your lender will work closely with you to see if a more permanent solution can be created. However, there are a few things you need to know.
The most important thing is that you are only eligible for the Payment Reduction Plan if you are determined to be ineligible for Fannie Mae's Home Affordable Modification Program (H.A.M.P.). If you decide that the Payment Reduction Plan is ideal for your situation you will have to have applied, and been rejected, for the H.A.M.P. first. Don't worry though, it is well worth the effort. The H.A.M.P. is by far the best foreclosure prevention program out there so if you qualify for it you will be happy!
The other thing you need to know about the Payment Reduction Plan is that your current loan must already be owned by Fannie Mae to be eligible. As you try to save your home it is imperative that you find out who owns your loan since this determines what programs are available to you. Go to SavingTheHouse.org to find out. This will be the single, most helpful step you will take during your quest to save your house from foreclosure.
Who should I contact?
Only your servicer can do this program. Your servicer is the company you mail your monthly mortgage payments to. Get out your monthly mortgage statement and call the customer service number on it. Ask to apply for the Payment Reduction Plan. It is often their "loss mitigation" department that handles these types of programs so they might transfer your call there. Just so you are aware, it is the law that they participate in the program!
What should I expect?
Be prepared to be persistent. Since this program can only be done by your servicer you are relying on the knowledge of the person that answers the phone. If they don't know what the Payment Reduction Plan is ask to speak to a supervisor. You might have to remind them that it is a new program. Once you have the right person be prepared to explain the situation and how it will change for the better. You will probably be asked to provide some personal financial documents and an explanation, or "hardship" letter.
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