For mortgage loans in active HAMP trial period plans initiated prior to March 1, 2010, all Fannie Mae-approved servicers must consider the Alternative Modification ("Alt Mod") prior to the initiation of foreclosure for all eligible borrowers who were not offered a permanent HAMP modification after making payments under a HAMP trial period plan.
All borrowers must meet the eligibility criteria outlined in the attached Lender Letter, including that the mortgage loan is secure by 1-4 family owner occupied property, and that the monthly mortgage payment ratio based on verified income was less than 31%, the target mortgage payment ratio of 31% could not be reached using the standard HAMP modification waterfall, or the borrower failed to provide all HAMP documentation but qualifies for new streamilined documentation under the Alt Mod program.
The policies in the Lender Letter apply to all conventional mortgage loans held in Fannie Mae's portfolio and to mortgage loans that are part of an MBS pool that have the special servicing option or a shared-risk MBS pool for which Fannie Mae markets the acquired property. A borrower that entered into a trial period plan prior to March 1, 2010 will be considered eligible for the Alt Mod as long as the case is submitted to FNMA prior to the final date of the program offering, which is August 31, 2010.
Ralph T. Wutscher
Kahrl Wutscher LLP
The Loop Center Building
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Chicago, Illinois 60602
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