Fannie Mae will end its Payment Reduction Plan (PRP), a program designed to give borrowers ineligible for the Home Affordable Modification Program temporary payment relief while the servicer works toward another foreclosure alternative.
According to a servicing announcement issued Friday, PRP will end Dec. 31, and any relief given before then must end before July 1, 2011, or within six months. Servicers must still report data to Fannie Mae, and its incentives to those servicers will still be paid on eligible PRPs when foreclosure is prevented.
A spokesperson for Fannie said recent volumes in the program were relatively small, and borrowers experiencing hardships such unemployment and problematic drywall, can still be put into regular forbearance plans and extensions.
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