Here we go again…

“A principal write-down or principal forgiveness is prohibited on Fannie Mae mortgage loans”.

Fannie Mae’s Alternative Modification to the Home Affordable Modification Program


In Announcement SVC-2010-03, Home Affordable Modification Program – Program Update and Resolution of Active Trial Modifications, servicers were instructed how to resolve active trial modifications under the Home Affordable Modification Program (HAMP) at the conclusion of the temporary review period on January 31, 2010. This Lender Letter introduces an alternative to the HAMP modification for those borrowers who were eligible for and accepted into a HAMP trial period plan but were subsequently not offered a HAMP permanent modification because of eligibility restrictions.

For mortgage loans in active HAMP trial period plans initiated prior to March 1, 2010, all Fannie Mae-approved servicers must consider the Alternative Modification™ (“Alt Mod™”) prior to the initiation of foreclosure for all eligible borrowers who were not offered a permanent HAMP modification after making payments under a HAMP trial period plan. All borrowers must meet the eligibility criteria outlined below. The policies in this Lender Letter apply to all conventional mortgage loans held in Fannie Mae’s portfolio and to mortgage loans that are part of an MBS pool that have the special servicing option or a shared-risk MBS pool for which Fannie Mae markets the acquired property. A borrower that entered into a trial period plan prior to March 1, 2010 will be considered eligible for the Alt Mod as long as the case is submitted through the HomeSaver Solutions® Network (HSSN) prior to the final date of the program offering, August 31, 2010.


Frequently Asked Questions

Fannie Mae’s Alternative Modification to the Home Affordable Modification Program