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FDIC Loan Modification Program
Avoid foreclosure with the FDIC mortgage loan modification plan
On January 28, 2009 the United States Treasury and Federal Reserve announced they will implement the FDIC loan modification model with all mortgages owned by the federal government. For example, the bailout and TARP money provided to companies such as AIG, Chase, Merrill Lynch, Bank of America, etc. If your mortgage investor took advantage of government bailout money, you could be eligible for these programs.
The concept of this program is to provide struggling homeowners with a “Time-Out” allowing them to catch up, get back on their feet, and stay in their home. This is done by establishing a cap on the interest rate based on income and expenses. This cap rate will be the highest rate paid for the term of your loan.
The program calls for a reduced interest rate for the first 5 years of the loan lowering your payment for the first 5 years. After the initial 5 year period, the loan will slowly adjust by about 1% per year until the established cap rate has been reached.
To help lower your payment further, the FDIC Loan Modification can provide for an extended amortization term of the mortgage to an additional 10 years. The maturity date of your mortgage does not change, so you will continue to make the lowered payments until the original maturity of your mortgage. Since payments are now calculated over an extended term, a balloon payment will be due when your loan matures.
The FDIC Loan Modification can provide a deferment of a portion of the principal on your mortgage. This deferment will not need to be repaid until the sell, refinance, or the maturity date of mortgage. There is usually no interest accrued on the deferred principal.
Am I Eligible?
What are the FDIC loan modification plan qualifications?
To find out if you may be eligible for the FDIC loan modification plan, answer 5 questions with a yes or no answer. Click below.
What are the other home loan modification programs available to avoid reno foreclosures?
For information on additional mortgage modification programs see Home Affordability and Stability plan and FHFA loan modification plan