Fannie, Freddie cut mortgage modification interest rate for first time in 2017

After four months of leaving the benchmark interest rate for standard mortgage modifications (not including HAMP mods) at an 18-month high, Fannie Mae and Freddie Mac recently announced that they are cutting the benchmark rate.

Back in January, Fannie and Freddie increased the standard mortgage modification benchmark rate from 3.875% to 4.25%. That level is the highest the benchmark rate has been since July 2015.

Now, Fannie and Freddie are cutting the benchmark rate slightly, but leaving it above 4%. The government-sponsored enterprises announced last week that they are cutting the benchmark rate to 4.125%.

The January hike marked the second straight month of an increase, after Fannie and Freddie dropped the benchmark rate throughout 2016, progressively decreasing it below 4%.

The increases also came after the GSEs dropped the standard mortgage modification benchmark interest rate to the lowest level ever, 3.5%, in August 2016.

Then, the GSEs increased the benchmark rate from 3.5% to 3.875% in December, before hiking it well above 4% in January.

And now, they’re cutting it back a bit.

The benchmark rate tracks with prevailing market rates, and the most recent data from Freddie Mac shows that interest rates have generally been the decline (with some slight modulation) over the last several months.

The standard modification program is “designed to help those borrowers who are ineligible for the Home Affordable Modification Program.”

According to the GSEs, the standard modification program is “designed to help those borrowers who are ineligible for the Home Affordable Modification Program.

Therefore, the new rate does not extend to HAMP borrowers.

The new 4.125% interest rate took effect on May 12, 2017.

4 Responses

  1. Betrayal the economy no value no dignity

  2. Caroline — one must ask why there was ever a HAMP program to begin with. Only modification of loans is possible? Why is that? Because title has been permanently destroyed. Modification just continues the undisclosed fraud from the onset. Where is the contract? Who is the modification with? Who determines whether a modification even takes place – and to what contract with whom? Courts say no contract under PSAs — so where is the contract? What is being modified? And, have to get down on hands and knees to get a modification. But, no one asks — ” A modification to what contract????” ” a modification with WHO????”

    To answer – the modifications are no where near what should have been done. Ask yourself this — what benefit is there to a bank negating a modification to the borrower, by which the alternative is a new foreclosure purchaser who can pay no different than what a modification could achieve? No benefit. The problem is — clearing title.

  3. HAMP expired at the end of 2016. I picture a vampire put to death with the sharpened end of the wooden post of a “foreclosure auction” sign.

    Is there a government program that caused more misery, waste of time, loss of money, and loss of real estate than HAMP? We can all blame our individual loan servicers for our own HAMP hells, but at what point would it have been wise for the government to pull the plug on the whole thing?

    Exactly how many homes were made affordable by MHA? Anyone know?

  4. Lets hope the GSE FOIA bill passes the Senate. SOON.

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