Real Estate News Headlines, Page 2: Fourth Quarter of 2010

The following headlines and news items were compiled from a number of authoritative sources and industry experts including Fannie Mae, Freddie Mac, the National Association of Realtors, Realty Track and the Wall Street Journal. The next news update is scheduled to be released in the first quarter of 2011.

Fannie Mae Introduces Second Lien Modification Program

On September 21, 2010, Fannie Mae introduced guidance for its Second Lien Modification Program (2MP). Fannie Mae's program follows the introduction of the Second Lien Program by the Treasury Department. The 2MP program works in conjunction with HAMP to assist borrowers achieve greater affordability by lowering payments on both first lien and second lien mortgage loans. Under the Home Affordable Modification Program (HAMP), a first lien mortgage forbearance is 10% of the outstanding loan balance. Under 2MP, the second lien mortgage forbearance is 10% of the outstanding loan balance.

If a borrower's loan is modified under HAMP, servicers of Fannie Mae second lien mortgage loans must also offer modification on the second lien. Servicers of Fannie Mae second lien mortgages must also dismiss any outstanding foreclosure action on the second lien if the borrower's first lien is modified under HAMP. Servicers for all eligible Fannie Mae second lien mortgage loans are required to implement the 2MP program no later than January 1, 2011. Some of the additional requirements include:

Only second liens with corresponding first liens that have been modified under HAMP are eligible for a modification under 2MP.

A mortgage loan that is subordinate to a second lien is ineligible under 2MP.

Modification of such a subordinate mortgage loan in place of the second lien will not satisfy the servicer's obligation under 2MP to modify the second lien.

Fannie Mae's complete set of guidelines can be read at Fannie Mae 2MP Guidelines. Source: NAR Weekly Newsletter, Posted: 09/29/10 || NAR's The Washington Report, Dated 9/27/10

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