Fannie Mae and Freddie Mac (FHFA),will not offer principal reductions as part of the government’s foreclosure prevention program, the Home Affordable Modification Program (HAMP) according to Edward DeMarco, acting head of the Federal Housing Finance Agency. He recently made the announcement, stating that the costs were prohibitive and that fewer than 248,000 homeowners would benefit from principal reductions. He also stated that some borrowers might purposely stop making their monthly mortgage payment in order to benefit from the program.
The FHFA’s decision drew criticism from many in the mortgage industry, including U.S. Treasury Secretary Timothy Geithner who pleaded with the FHFA to reconsider.
Anna Cuevas, a former No. 1 ranked bank executive and now a nationally-recognized home loan modification expert, finds the FHFA policy especially egregious. Recent changes to HAMP provide Fannie Mae and Freddie Mac with incentives to participate in principal reductions, just as it does to private banks and servicers. “It is a shame for homeowners that the Treasury’s financial agents for the program do not have to follow the guidelines that non-government service entities are asked to do,” said Cuevas.
Cuevas reminds homeowners that the FHFA’s announcement is only for loans backed by Fannie Mae and Freddie Mac. She notes that, ironically, when the HAMP program began in March 2009, Fannie Mae and Freddie Mac required all the servicers of their loans to participate in the GSE HAMP program. Under the framework of the HAMP program, servicers may forgive mortgage principal at any step in the process.
Borrowers have until December 31, 2013 to be accepted in the Home Affordable Modification Program, which provides guidelines for loan modification and assists homeowners who are at risk of foreclosure. Cuevas, a blogger for The Huffington Post’s Money section and a CNN Heroes nominee, provides extensive information about the loan modification process on her blog, www.AskaLoanModGuru.com.
Her acclaimed book, Save Your Home Without Losing Your Mind or Money, also gives at risk homeowners the step-by-step guidance they need to successfully negotiate the home modification loan process with the FHFA, and stop foreclosure. Her breakthrough techniques and deep insider knowledge of the mortgage industry has helped thousands of people nationwide save their homes. Financial experts have praised her knowledge and her program which enables homeowners to make sense of the bureaucracy of the home loan modification process. Personally experiencing the stress of home loan modification herself, Cuevas also encourages at-risk homeowners emotionally, helping them substitute feelings of failure with empowering knowledge and information.
Cuevas can be contacted at press@saveyourhomethebook.com or through her blog, www.AskaLoanModGuru.com.
Anna Cuevas is available for media inquiries or interviews.