Fannie/Freddie Flex Modification Update

Hola,

I wanted to share some exciting updates about Fannie Mae and Freddie Mac’s loan modification programs. These changes could make a big difference for many borrowers.

Key Changes:

Eligibility for Deferred Amounts: Borrowers with a Loan to Value (LTV) greater than 50% are now eligible for deferred amounts. This means that if you were previously denied a modification, you might now qualify. This could turn a denial into an approval!
Retention of Current Contractual Rate: Borrowers can keep their current contractual interest rate if it is below the current modification rate of 6.5%. This applies to fixed-rate loans with an LTV greater than 50%. It’s a bit more complex for ARMs and Step Rate Mods, so we’ll save that for another time.

Example:

Let’s break this down with an example:

Description	Amount
Modified Balance	$600,000
Property Value	$1,000,000
Loan to Value (LTV)	60%
Eligible Deferred Amount	$100,000
New Interest-Bearing Balance	$500,000

Calculation:

LTV: $600,000 (Modified Balance) / $1,000,000 (Property Value) = 60%
Deferred Amount: Up to $100,000 of the Modified Balance can be deferred, resulting in a new interest-bearing balance of $500,000.

Mandatory Implementation required by 12/01/2024. Under current guidelines, borrowers rarely received deferred amounts when their LTVs were between 80% and 100%.

Click below for supporting information:

FHFA Announces Enhancements to Flex Modification for Borrowers Facing Financial Hardship

Eligibility Requirements for a Freddie Mac Flex Modification

Other Modification Conditions and Requirements

Determining the terms of a Freddie Mac Flex Modification Effective 11/1/24

Other Modification Conditions and Requirements Effective 12/1/24

Eligibility Requirements for a Freddie Mac Flex Modification Effective 12/1/24

Freddie Mac Flex Modification Reference Guide Determining the terms of a Freddie Mac Flex Modification Effective 12/1/24

Determining the terms of a Freddie Mac Flex Modification Effective 12/1/24

Roberto Rivera

Founder of RR Compliance Consulting

Roberto Rivera is a nationally recognized loss mitigation consultant, professional speaker, and thought leader in loan modification.

Since founding RR Compliance Consulting in 2009, Mr. Rivera has established a reputation among the legal industry as the “go-to” consultant for loss mitigation. He has worked with more than 50 real estate and bankruptcy attorneys in nine states across the country, and achieved a success rate of 99+% in securing favorable outcomes for homeowners seeking loan modifications.

Mr. Rivera has vast knowledge of government initiatives, industry regulations, and banking policies regarding home retention programs. Through detailed analysis of successful loan modifications, he has uncovered many proprietary processes, formulas, and algorithms used by financial institutions in determining case outcomes. What differentiates him from almost all others in the industry is his passion to set realistic expectations for borrowers. He has also applied Regulations X and Z to deepen his understanding of bank programs and opportunities.

As a sought-after leader in loan modifications, Mr. Rivera has served as a keynote speaker and presented at numerous high-profile industry events and training programs, training hundreds of Attorneys. He has had multiple appearances at Max Gardner’s Bankruptcy Boot Camp, Max Gardner’s Consumer Defense Academy, and seminars sponsored by RR Compliance Consulting. Mr. Rivera has also conducted industry training programs with a former Ohio Attorney General. Topics of his training and presentations have included Loss Mitigation, Loan Modifications, and Regulations X and Z.

Much of Mr. Rivera’s success can be attributed to his vast experience and relentless pursuit of knowledge in all aspects of home retention from initial application through appeal and successful disposition. He is well-versed in programs offered by all major investors and guarantors.

Prior to establishing RR Compliance Consulting, Mr. Rivera served as a Mortgage Broker for three firms for more than 10 years. Here, he cultivated strong relationships with major financial institutions, learning the policies, preferences, and risk tolerances of individual banks. He assessed his clients’ financial backgrounds and secured appropriate mortgages.

As a Licensed Real Estate Agent in Florida, Mr. Rivera managed all aspects of the real estate process from acquisition through renovation and sale for several developments.

Roberto Rivera was raised on St. Croix, U.S. Virgin Islands, and is a proud veteran of the United States Marine Corps.

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