Principal “Curtailment” for Underwater Home Owners

If you fit this description:

  • Have low to moderate income
  • Owe more than your house is worth
  • Live in your home
  • Are delinquent, or have a hardship that puts you at risk of default
  • Have a mortgage balance of less than $729,750

Read this article….

Principal relief for stressed homeowners

A limited number of underwater homeowners in California will soon be able to get principal reductions of up to $100,000 apiece on Fannie Mae and Freddie Mac loans through the federally funded Keep Your Home California program.

The federal agency that oversees Fannie and Freddie has steadfastly refused to allow permanent principal reduction on loans they own or guarantee on the grounds it would cost taxpayers money. But in mid-September, Fannie and Freddie told servicers they could immediately begin accepting money for principal reductions from programs financed by the U.S. Treasury’s Hardest Hit Fund, including Keep Your Home California.

Fannie’s and Freddie’s willingness to accept money from Hardest Hit Funds does not signal a change of heart on the part of their regulator, the Federal Housing Finance Agency. Lest anyone get the wrong idea, Freddie says it will allow funds to be used for “principal curtailment.”

Read the rest here…

via Principal relief for stressed homeowners – SFGate.

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