Borrowers with mortgages backed by Fannie Mae and Freddie Mac that are at least 90 days late will begin receiving offers from lenders to reduce their rates. Called the Streamlined Modification Initiative, borrowers will be able to reduce their payments by either having the loan extended from, say, 30 to 40 years, or their interest rates will be reduced—but the principal will remain. Borrowers with a high-rate loan who could not qualify for a refi during the era of ultra-low interest rates merely do a trial run of making payments three consecutive months and the modification becomes permanent. As CNNMoney tells MHProNews, other requirements include the loan must be at least 12 months old, borrowers cannot be more than 24 months in arrears and their principal balances must be 80 percent or above the value of their home. The program is set to run through Dec. 2015.
