The Fannie Mae Loan Modification Program intends to prevent foreclosures by providing eligible borrowers with loan modifications that result in affordable and sustainable monthly payments. Loan modifications are available to borrowers who are in default or at imminent risk of default, but who are ineligible for the Governments Home Affordable Modification Program, HAMP. If you are considering this alternative, and you are able to modify the terms of your loan through this program, you can expect the modification to result in a reduction of interests and principal of the original loan of at least 10%.

If you are interested in this loan modification program, the first step is to figure out if your loan is owned by Fannie Mae or Freddie Mac. If this is your case, then you need to contact your mortgage servicer and express your interest in this alternative. The mortgage servicer is the company who processes your monthly payments, and you can find its contact information in your mortgage payments coupon book. Loans that are not owned by Fannie Mae and Freddie Mac do not qualify for this modification program.

If you are able to reach an agreement with your lender, your monthly payments may be reduced to an affordable amount. This may be a good alternative if you cannot refinance your mortgage, and you are experiencing financial difficulties. You must be behind your mortgage payments or about fall behind.

The modification of your loan may result in changing the type of mortgage; for example from an Adjustable Rate Mortgage, ARM, to a Fixed-Rate Mortgage with a 30 or 40 year term. Another result could be the permanent reduction of the interest rate. A less desirable but likely outcome may be the decrease of any equity you may have through the amortization of past due amounts and the loan itself into a new agreement.

Although you may discouraged by the prospect of losing whatever equity you have, this may be a better alternative than letting your mortgage become/continue delinquent, and losing your home to foreclosure. By applying and getting a loan modification you will resolve your delinquency status, may reduce your mortgage payments to a manageable amount, may have your mortgage modified to meet your your financial realities, ameliorate the damage to your credit score, and keep your home.

If you choose to reach out to your lender, be prepared to answer many questions. Have a good attitude, and be candid on your responses. Your lender may ask questions that help it understand your situation. For example, why are you falling behind your payments? Do you think this is a long term or a short situation? If your loan if owned by Fannie Mae or Freddie Mac, your mortgage servicer is required to consider a loan modifications.

Visit this website to determine if Fannie Mae or Freddie Mac own your loan: https://knowyouroptions.com/loanlookup

Fannie Mae and Freddie Mac provide you with this modification calculator so you can explore this option: http://knowyouroptions.com/find-resources/information-and-tools/financial-calculators/modification-calculator

For detailed information about this program, and other modification alternatives, visit the Fannie Mae sponsored Know Your Options website: http://knowyouroptions.com/

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