Recent reports have indicated that Fannie Mae will stop their Payment Reduction Plan in December, which previously was established as a way to provide mortgage assistance for homeowners who were seeking modifications or simply needed a more affordable monthly payment to avoid foreclosure.
It was stated that homeowners will have until December 31 to qualify for this Payment Reduction Plan from Fannie Mae, but if they are granted relief from this program, this service must end before July 1, 2011.
While this news may be troubling for some homeowners, there is hope and that homeowners who are still struggling and were attempting to receive a payment reduction plan may still be able to qualify for traditional forbearance plans or mortgage extensions. Homeowners who are in simple need of more affordable payments may either be able to extend their mortgage terms, which obviously would lengthen their repayment time and lower their monthly payment obligations, or may be given forbearance on their mortgage payments until they can get back on their feet.
Various mortgage assistance programs implemented by some of the nation’s top servicers have been mixed, according to certain analysts who say that lackluster performances from programs like the Making Home Affordable Program and other mortgage assistance plans have not helped the number of homeowners that had originally been planned and foreclosures still remain a problem for many. For this reason, there are some who worry the the retirement of the PRP from Fannie Mae might cause homeowners additional difficulties when seeking assistance.
While the retirement of the Payment Reduction Plan may worry some homeowners, the announcement of this program’s retirement stated that, while this particular program will no longer be available to assist homeowners who are attempting to transition to a home loan modification plan, Fannie Mae still is prompting servicers to use other foreclosure prevention options in order to help homeowners find affordable solutions which will allow them to continue making their monthly mortgage payment obligation.