STEPS IN THE FLEX MODIFICATION PROGRAM
Flex Modification requires the mortgage servicer to reduce the homeowner’s payments on the loan by adjusting the interest rate, adding overdue payments to the remaining loan balance, extending the term of the loan, or setting aside part of the remaining principal. Any part of the principal that has been set aside is not eliminated but instead allocated to a balloon payment. The homeowner will need to pay this amount in a lump sum at the end of the loan term, or when they sell the home or refinance it if this happens before the end of the term. Each of these techniques will reduce the amount of the monthly payment. If you miss payments on a Fannie Mae or Freddie Mac loan over a period of 90 to 105 days, the mortgage servicer must determine whether you are eligible for the Flex Modification program. This means that your mortgage servicer may offer it to you regardless of whether you have applied for it. Also, you can apply for the Flex Modification program at any time before the foreclosure sale. As long as you apply for the Flex Modification program at least 38 days before the foreclosure sale, the lender cannot proceed with the sale until it reviews your application. Similar to other loan modifications, the Flex Modification program requires completing a trial period before the modification can be finalized. This consists of a few months in which the homeowner makes payments as required by the modification. Keeping up with these payments will automatically make the modification permanent. If you successfully enter the program, you probably will not be required to pay late fees and other penalties.
10. FHA PARTIAL CLAIM
A FHA partial claim is a federally backed interest-free loan from
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