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Home > Overcoming Payment Challenges > The Fast Track Loan Modification Program

The Fast Track Loan Modification Program

Treasury Secretary Henry M. Paulson, Jr. recently stated, "After years of unsustainable home price appreciation and an abundant supply of easy credit, the U.S. Housing Market is experiencing an inevitable downturn". To complicate matters, it is estimated that 1.8 million owner-occupied subprime mortgages with adjustable rate terms are scheduled to reset in 2008 and 2009. While some homeowners will be able to afford their new payments without trouble and many others will qualify to refinance into a fixed-rate mortgage, there are those who are already stretched beyond their means. "Unfortunately," per Under Secretary Robert K. Steel, "for many of these borrowers, foreclosure is inevitable. A third group of homeowners facing resets falls somewhere in the middle".

The Fast Track loan modification program is specifically designed to provide a flexible alternative for those borrowers in this "middle" group who hold Adjustable Rate Mortgages (ARM). This program has been recommended by the Department of Treasury, the Federal Deposit Insurance Corporation ("FDIC") and other federal officials, along with an industry task force and an investor trade group. This Fast Track loan modification program is not a bailout; no federal money is being used toward this program and lenders and servicers are not obligated to adopt the program. The most publicized part of the program is a five-year freeze on the introductory interest rate. Not all borrowers are eligible for a Fast Track loan modification.

Eligibility
This program is targeted at borrowers who are current on their adjustable rate mortgage ("ARM") loans, but who may not be able to find available refinancing and cannot afford the increase in payments that will occur upon rate reset. The basic qualifications for the Fast Track loan modification program are as follows:

  • The loan must have been originated between January 1, 2005, and July 31, 2007.
  • The initial interest rate is scheduled to reset between January 1, 2008, and July 31, 2010.
  • The initial fixed-rate period is 36 months or less (2/28 and 3/27 loans are the most common combinations.
  • The borrower must currently occupy the property as his or her primary residence.
  • The borrower's current FICO score must be <660 and is less than a score 10% higher than the FICO score at origination.
  • The servicer determines that, at the upcoming reset, the payment amount would go up by more than 10%.

Borrowers who meet the above qualifications may be offered a loan modification pursuant to which the interest rate will be kept at the existing rate for five (5) years following the upcoming reset date.

Borrowers who do not meet the qualification standards for the Fast Track loan modification program may qualify for other modification programs offered by HomEq.

HomEq will notify our borrowers by mail if they are eligible for this program. If you receive a letter from us that indicates that you are eligible, please continue making your payments and follow the instructions in the letter to expedite processing of the modification. However, if you are having trouble making your payments, please call us immediately. Our business hours are Sunday 8:00am-5:00pm, Monday-Friday 5:00am-8:00pm and Saturday 5:00am-1:30pm PT. Our number is (800) 795-5125.