The Federal Housing Finance Agency (FHFA) has amended the loan modification terms for COVID-19-affected borrowers with mortgages secured by Fannie Mae or Freddie Mac who need to cut payments to keep their home successful.
The updated terms are designed specifically for borrowers constantly suffering from COVID-19 and in response to the unprecedented nature of the pandemic.
The Flex modification terms will be adjusted to reflect the difficulties of COVID-19, making it possible to lower the interest rate for eligible borrowers regardless of the ratio of the loan amount to the cost of the borrower. Previously, only borrowers with a market value of loan to value ratio (MTMLTV) exceeding or equal to 80 percent were eligible for a possible reduction in interest rates.
“Giving more families the right to lower interest rates will prevent unnecessary foreclosures, help strengthen business ledgers, and make sustainable home ownership a reality for more families currently living in a climate of uncertainty,” says FHFA Acting Director Sandra L. Thompson.