Cash is King – Upside Down Mortgage Solutions

December 19, 2008

Mortgage Loan Modification: FDIC, Fannie Mae and Freddie Mac Are Here to Help Homeowners.

Listen in on a Interview I did on Loan Modifications and the Fannie Mae and Freddie Mac Streamline Loan Modification Program

Need help with a mortgage loan modification of If you are behind on your mortgage payments

this column will provide you with some useful information.

There is a lot of talk these days from all lender, the FDIC and both Fannie Mae and Freddie Mac with regards to mortgage loan modification.  I think its great that these companies and institutions have stepped up to help homeowners but I have also found that many mortgage loan modifications can be potentially dangerous.  You can find out more information on that topic in this post on Mortgage Loan Modification Terms.

IMPORTANT TO NOTE: If you are current on your mortgage payments we can help there as well.  It requires additional footwork but can be done if we provide the bank with a very “good reason.”  I often find it easy to find the reason because it can be as simple and your debt to income ratio or being self employed or you have declining income.  All these things are ‘reasons’ we give to the bank as to why they need to help you with a note modification.

To have me review your scenario please email me at with Mortgage Loan Modification as the subject


Washington, DC – Seriously delinquent borrowers with mortgages owned by Freddie Mac or Fannie Mae can now take advantage of a new Streamlined Modification Program designed to make mortgage payments more affordable so more families can avoid foreclosure and stay in their homes.   The Streamlined Mod Program officially went into effect on December 15, three days after Freddie Mac sent detailed implementation instructions to its servicers.

Announced on November 11, 2008 with the Federal Housing Finance Agency (FHFA), Fannie Mae and the HOPE Now Alliance, the Streamlined Modification Program replaces several time-consuming steps in a traditional loan modification with a faster uniform process that uses standard eligibility requirements and documents.

“This initiative builds on Freddie Mac’s current loss mitigation efforts, which are on track to provide three out of five of our seriously delinquent borrowers with a workout this year,” said David M. Moffett, Freddie Mac’s Chief Executive Officer.  “Our alliance with FHFA, Fannie Mae, and the HOPE Now Alliance will help our industry bring relief to thousands of distressed homeowners.”

Under the Streamlined Modification Program, mortgage and escrow payments can be cut to 38 percent or less of an eligible borrower’s gross monthly income by one or more of the following steps as necessary: reducing mortgage rates, extending the mortgage term up to 40 years, or forbearing part of the principal. To be eligible, borrowers must own and occupy the property as a primary residence, have missed at least three mortgage payments and not filed for bankruptcy.

Borrowers should contact their servicers if they think they may qualify.  At the same time, servicers will be identifying eligible borrowers and reaching out to them through the mail.

If an affordable payment cannot be achieved through the Streamlined Modification Program, servicers will evaluate borrowers through the traditional modification process. Servicers will also continue reaching out to distressed borrowers as early as possible to determine their eligibility for a workout or other foreclosure alternative.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.



  1. I have been trying to get Wells Fargo to modify my loan but I am not delinquent so they sent me a 4 month moratorium pay schedule. I really need to get a lower interest rate not a temporarily reduced payment which includes fees.
    I am at 6 3/8 10/1 Interest only.

    Please help.

    Comment by Ed Garland — January 26, 2009 @ 6:04 pm | Reply

    • Dear Mr. Garland, did you modify your loan yet? Or you dealing with Wells Fargo?

      Comment by Moe Taha — September 28, 2009 @ 8:44 am | Reply

  2. Indymac is a bear to deal with too. They will not budge unless you are 60 days down.

    Comment by Ed — May 11, 2009 @ 1:54 am | Reply

  3. I’ve been trying to get citimortgage to help us they get back to us in 30 day an then it was going to be 90 days. we try talking to them know they say we have to pay 6086.00 by 7-2-09 there is no way i’m raising 4 grandchildren lost my overtime because job losts and grandpa on sss

    Comment by June Vargas — June 9, 2009 @ 12:47 am | Reply

    • Dear Mrs. Vargas

      Have you got your modification yet or did CitiMortgage has helped you already?

      Comment by Moe Taha — September 28, 2009 @ 8:46 am | Reply

  4. We have been trying to modify our mortgage with CitiMortgage since September. We were on a trial period for six months from September until March where our payments went from $1788 to $591 for the six months. When I called them three weeks ago, I was told that we were denied for the Affordable Home Modification, I broke out in tears! The woman told me that there was nothing else they could do and we had to start making our normal payment of $1788 staring May 1st which was impossible!! I then called back a week later to see what they said and a gentlemen told me that there was something they could do and that was to try to get approval for a Traditional Home Modification. So now I call them weekly for an update, still waiting to see if we get approved. This is terrible, not knowing from day to day if you are going to be able to stay in your home or not. I don’t understand why these companies would not want to keep families in there homes in which they have worked hard for. It really sucks knowing what you have invested in your home and you may lose it because you have a payment that you cannot afford!!

    Comment by Jennifer Long — May 26, 2010 @ 4:25 am | Reply

  5. Don’t assume lenders are rationale or act in their own self interest. This is never-neverland where up is down and down is up. You should consider for filing a Chapter 13 bankrupty repayment plan.
    Don’t throw good money after bad and don’t expect your lender will do the right thing. They won’t. Go on the offensive and file Chapter 13. Don’t let the leehces suck you down into their vortex of greed.

    Comment by peter klika — June 10, 2010 @ 7:36 am | Reply

  6. We are in the same boat as Jennifer Long. We were preapproved for the Home Affordable Modification June 2009. So we were put on a trial period for 3 months, which ended up lasting until April 2010 due to CitiMortgage taking so long to look at our account. In April, we found out we were declined for the program. CitiMortgage told us we could dispute this within thirty days. So I wrote a letter and sent in additional documents that were needed. My husband is part owner in the company he works at, so we had to send in business documents as well as personal documents again. I call Citimortgage weekly to find out were we are in the process. You can never talk to the same person and information is always different. We were suppose to hear if we were apprroved for the Traditional Modification by June 15. We still haven’t heard from the counselor assigned to our case. This whole process has been going on a year. Each month we go in the hole with the amount we will have to pay back, since our payment amount was modified from $2626 to $1456. Going back to our regular payment will be extremely hard, but we have been told if we don’t get approved for the modification we will have to make additional payments to pay back that extra amount. My husband’s company has been dramatically affected by the downturn in the economy since 2009. We can’t pay back any of that money and I’m not sure we can even make the normal payment again. Each day we wait to hear something. We’re just asking for some help with our mortgage. Didn’t the government help out the banks when they were in need? Did they have to wait for a year to hear an answer on whether they would get the help?

    Comment by Maranda G. — June 22, 2010 @ 3:07 pm | Reply

  7. Just saw this site and the comments about CitiMortgage today.
    We are in the same boat as jennifer & Maranda in that we were denied a permanent modifcation after a trial period of 7 months. But what I haven’t seen mentioned is our experience of never being told we were denied! (no denial letter…still don’t have this). What happened was the collections dept sent a letter saying we were in default for two months and threatening a foreclosure. Of course we freaked out. After raising all kinds of hell about the circumstances and giving them add’l info about our income, we’re now being considered for a ‘traditional modification’ (I believe this is a fannie mae program) and this is pending (this just came up yesterday). What were most confused about is the collections dept and the mitigation dept are on different planets! Anyway, now that some time has passed, can you tell me whats happened in your cases???thanks.

    Comment by Zane K — July 7, 2010 @ 7:05 pm | Reply

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