FNMA screws delinquent home owners AGAIN through hardship modifications

I've been around the block a couple times, so I didn't actually have to read the FNMA news release about hardship modifications to know that it will PRIMARILY benefit Fannie Mae.

But when I ran across the December 18, 2008 FNMA news release, I decided to read it and it was exactly what I expected:

Another FNMA bail-out, this time paid for by the delinquent home owners.

Streamlined Modification Program (SMP) Now Available to Borrowers


[Repulsive lies about helping borrowers and the HOPE NOW alliance to implement the measures to mitigate the lenders' losses]


Modification Options

Through the SMP, servicers may change the terms of a loan to reduce a borrower's first lien monthly mortgage payment, including taxes, insurance and homeowners association payments, to an amount equal to 38 percent of gross monthly income. The changes in terms may include one or more of the following:

  • Adding the accrued interest, escrow advances and costs to the principal balance of the loan, if allowed by state law;
  • Extending the length of the mortgage loan as appropriate;
  • Reducing the mortgage loan interest rate in increments of 0.125 percent to an interest rate that is not less than 3 percent. If the new rate is set below the market interest rate, after five years it will step up in annual increments to either the original loan interest rate or the market interest rate at the time of the modification, whichever is lower;
  • Forbearing on a portion of the principal, which will require the borrower to make a balloon payment when the loan matures, is paid off, or is refinanced.


Highlights of the SMP's eligibility requirements communicated to servicers include:

  • Conforming conventional and jumbo conforming mortgage loans originated on or before January 1, 2008;
  • Borrowers who are at least three or more payments past due and are not currently in bankruptcy;
  • Only one-unit, owner-occupied, primary residences; and
  • Current mark-to-market loan-to-value ratio of 90 percent or more.

... [emphasis added]

This program has NOTHING to do with helping homeowners -- it is a lender LOSS PREVENTION program.

They'll calculate the 38% of the monthly gross income and then their software calculatoes how to maximize their profits by extending the loan terms, etc. 

"Mark-to-market" means that they are using the CURRENT market value of the homes to establish whether they should modify the loan.


If the LTV is LESS than 90%, the borrower has incentive to beg, borrow and steal to be able to KEEP the property.  After all, he still has equity and if the lender has to foreclose, the losses will be much lower than with an LTV OVER 90%.

Even if the mortgage is 150% of current value, they will NOT forgive part of the principal balance.  If you've had a student loan, you know what forbearance means:  you'll pay it later.

They're INCREASING the repayment period and ADDING to the principal balance!

A bunch of lying criminals who'll do ANYTHING to maximize profits -- even if it means destroying the lives of the suckers who are thrilled to be "helped" by scummy outfits like HOPE NOW.

... "By bringing the collective efforts of FHFA, Treasury, HOPE NOW, Fannie Mae, Freddie Mac and other mortgage industry participants together through the SMP to confront the foreclosure challenge, we'll be able to help more families across America stay in their homes," said Herb Allison, Fannie Mae president and CEO. ...

FNMA CEO Allison ought to get a few years in prison for that stunt. 

Everywhere I look I see crooks and liars.

And the only thing more depressing than watching this incredible deception is to know that many of the victims will be HAPPY to be "helped" and while some will eventually figure out that they got screwed, many will not. 

Corrupt organizations like Hope Now support the exploitation of the mentally challenged.

This is putting me in a really bad mood.  I know that not everybody can have an IQ above 70 and that people are deliberately dumbed down by TV, chemicals in the water and food and that they don't learn to think and add in school. 

Still, that I don't see a public outcry sure is frustrating. 

Am I really the only person in America upset by this fraud?

The only person to care?