Fannie Mae noted within the program documentation that in all cases a signed hardship affidavit is required, and the Alt Mod mortgage payment may not be reduced below 20 percent of the borrower’s verified monthly gross income. The GSE also stressed that a principal write-down or principal forgiveness is prohibited on Fannie Mae mortgage loans.
For qualified borrowers who are already identified as ineligible for a permanent HAMP modification, Alt Mod offers must be sent to them within the next 30 days. Going forward, for other borrowers who entered into a trial plan prior to March 1, 2010 but are denied a permanent HAMP mod, offers must be sent within 10 days of completion of the trial period and expiration of the 30-day HAMP borrower notice.
A servicer will receive compensation of $800 for each completed Alt Mod. Unlike HAMP, there are no borrower incentive payments available under the alternative program.
The GSE is also seeking blanket delegations of authority from mortgage insurers so that servicers can more efficiently process Alt Mods without having to obtain mortgage insurer approval on individual loans.
Fannie Mae noted that the Alt Mod is a temporary servicing policy change, with a sunset date of August 31, 2010