Mortgage write down program

Excluded mortgage principal balances sitting in interest-free accounts are subtracted from their mortgage loans, with the result being lower payments. Mortgage borrowers making steady and timely payments on non-excluded mortgage balances see the excluded principal balances in their interest-free accounts eventually eliminated.

Your mortgage might actually be owned by Fannie Mae and Freddie Mac and is only being serviced by your lender. Loans owned by Fannie and Freddie are eligible for federally sponsored loan modification, otherwise known as write down.

The federal government's Making Home Affordable Program offers loan modification and refinancing opportunities for those with Fannie or Freddie-owned mortgages. California and other states have their own versions of the federal government's Making Home Affordable Program. Most state-sponsored mortgage write down programs are limited to low-and-middle-income borrowers with no cash-out refinancing on their mortgages.

States have been offering grants of matching funds to encourage lenders to approve mortgage write downs. Frank said. Many second mortgages have little value because of the plunge in home prices, Rep. Lack of cooperation from holders of second mortgages also can block short sales, in which the first-lien lender allows the home to be sold for less than the loan balance to avoid foreclosure. If the second-lien holder continues to press its claim, the sale can fall through.

The ensuing foreclosure is likely more costly for all parties than a short sale would have been. This has been blamed for the failure in various government housing programs to try and reduce the number of foreclosures. Bank of America has agreed to take part and other big lenders are expected to follow suit. Click here to cancel reply. Name required. Mail will not be published required. Put my Donation on the Recognition Wall. Comments: Write your comment within characters. Categorized bank of america.

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