Thursday, December 14, 2017
Business

Fannie Mae, Freddie Mac to offer simpler, no-doc loan modifications

In a push to simplify loan modifications, many U.S. borrowers who become 90 days or more past due on mortgages backed by Freddie Mac and Fannie Mae will be offered lowered payments without having to prove hardship, the federal regulator of the home-finance giants said.

The streamlined modification program, to be put into effect in July, would reduce monthly payments by about 30 percent on average, officials said in announcing the program Wednesday.

Eligible borrowers would receive letters explaining the modification offer and specifying the reduced payment. If they made three monthly payments during a trial modification period, the new loan terms would become permanent — without them having to document their financial situations.

Fannie and Freddie own or guarantee more than half of all U.S. home loans. They pay mortgage customer service providers — which are mainly large banks — to collect payments, handle foreclosures, and work to modify loans for troubled borrowers.

Problems with servicers have included frequent complaints of lost or mishandled paperwork. And many troubled borrowers have not responded to servicers' efforts to reach them to discuss foreclosure alternatives.

The new program, announced by the Federal Housing Finance Agency, is designed to address those problems, the FHFA said. "This new option gives delinquent borrowers another path to avoid foreclosure," said FHFA's acting director, Edward J. DeMarco.

FHFA officials said they did not believe the new program would encourage a flood of so-called strategic defaults, in which borrowers who could afford to pay fall behind intentionally to get their loans modified. Fannie Mae and Freddie Mac have existing screening measures to prevent strategic defaulters from taking advantage of the program, the FHFA said.

DeMarco encouraged borrowers to apply for modification programs requiring documentation, saying they probably would wind up with lower payments than those generated by the streamlined modifications.

To qualify for the streamlined program, homeowners must be delinquent by at least 90 days but no more than 24 months. The loans must be first mortgages, at least 12 months old, and be for 80 percent or more of the property value. Loans that have been modified two or more times previously are not eligible.

The modifications would cut the interest to half a percentage point above the going rate for conventional loans, which currently would result in a 4 percent rate. The repayment term would be extended to 40 years. And in some cases, borrowers would not be required to pay interest on a portion of the loan balance.

The program does not alter DeMarco's controversial refusal to allow reductions in the principal owed — a policy that has caused many advocates and government officials to call for his ouster. DeMarco has maintained that reducing principal would end up costing taxpayers money and could encourage additional defaults.

Comments
Florida hospitals call for more funding in effort to address looming doctor shortage

Florida hospitals call for more funding in effort to address looming doctor shortage

The number of doctors practicing in Florida has not kept up with the state’s surging population growth, and more money is needed to recruit and keep them here, hospital leaders said Wednesday.The shortage is particularly acute in four speciality area...
Updated: 6 hours ago
Allegiant Air mechanics ask to be represented by Teamsters

Allegiant Air mechanics ask to be represented by Teamsters

Allegiant Air mechanics filed with the federal government Wednesday to be represented by the International Brotherhood of Teamsters. If the petition is passed, the union would negotiate on behalf of the mechanics and related technicians on issues suc...
Updated: 7 hours ago
Federal Reserve boosts key interest rate for third time this year

Federal Reserve boosts key interest rate for third time this year

WASHINGTON — The Federal Reserve is raising its benchmark interest rate for the third time this year, signaling its confidence that the U.S. economy remains on solid footing 8˝ years after the end of the Great Recession. The Fed is lifting its short-...
Updated: 10 hours ago
Pasco Business Digest for Dec. 15

Pasco Business Digest for Dec. 15

Business digestWho’s newsHOSPITAL APPOINTS ASSISTANT CHIEF NURSING OFFICER: Registered nurse Courtney Stephenson, board certified nurse executive advanced, was recently appointed assistant chief nursing officer at Medical Center of Trinity. Stephenso...
Published: 12/13/17

Hernando Vendors for Dec. 15

Vendors are needed for the following nonprofit events:• Vendors and volunteers are being sought for a National Homeless Persons’ Memorial Day event from 8 a.m. to 3 p.m. Dec. 21 at Crescent Community Clinic, 5244 Commercial Way, Spring Hill. During t...
Published: 12/13/17
Tampa airport ranks No. 4 for most affordable parking rates

Tampa airport ranks No. 4 for most affordable parking rates

TAMPA — Holiday flight prices may be high, but parking rates at Tampa International Airport are a little more manageable. TIA has the fourth-cheapest parking rates in the country, a study by travel and expense app company TravelBank said. TIA, the st...
Published: 12/13/17

Hernando Business Digest for Dec. 15

EventsDISCOUNT OFFERED TO THOSE WHO DONATE TO HELP HOMELESS: In advance of National Homeless Persons’ Memorial Day, BonWorth clothing store, 12987 Cortez Blvd., Spring Hill, will offer a 10 percent discount on purchases to those who donate unwanted c...
Published: 12/13/17
Target aims to boost same-day delivery by acquiring Shipt

Target aims to boost same-day delivery by acquiring Shipt

NEW YORK — Target plans to boost its same-day delivery capability by paying $550 million for Shipt, its latest move to try to catch up with Amazon. Shipt delivers groceries to its members, who pay $99 a year. Target says it will add more products to...
Published: 12/13/17
Spirit Airlines names new president, CEO for 2019

Spirit Airlines names new president, CEO for 2019

Spirit Airlines, the South Florida-based budget airline, is gearing up for new leadership. Bob Fornaro, president and CEO since January 2016, will step down from his position in early 2019. He will be succeeded by Ted Christie, the airline’s current ...
Published: 12/13/17
Three things to watch for at the Federal Reserve meeting today

Three things to watch for at the Federal Reserve meeting today

WASHINGTON — On the day when Janet Yellen will hold her final news conference as Federal Reserve chair, the Fed has left little doubt what it plans to do Wednesday: Raise its benchmark interest rate for the third time this year. The increase would be...
Published: 12/13/17