Fannie Mae Retires Payment Reduction Plan Program


On October 29, 2010, Fannie Mae issued Announcement SVC-2010-16 to servicers stating they are retiring the Payment Reduction Plan (PRP) program effective December 31, 2010.

The PRP program, introduced in 2009, was designed to provide borrowers ineligible for the Home Affordable Modification Program (HAMP) with temporary payment relief while the servicer and borrower worked together to find an appropriate permanent foreclosure prevention solution.

Under the program, a homeowner’s mortgage payments can be reduced up to 30% of the contractual monthly payments of principal and interest. The program covers owner occupied properties, as well as investment properties and second homes.

According to the Announcement, all PRPs must be initiated on or before that date and must end by July 1, 2011, or within 6 months of commencement, if earlier.

Servicers must continue to report PRP data on a monthly basis in the HomeSavers Solution® Network. Servicer incentives will continue to be paid on eligible PRPs upon the successful completion of a permanent foreclosure prevention alternative.

A spokesperson for Fannie said recent volumes in the program were relatively small, and borrowers experiencing hardships such unemployment and problematic drywall, can still be put into regular forbearance plans and extensions.

Servicers should continue to use other foreclosure prevention options available, as indicated in the Servicing Guide, Part VII, Chapter 6: Foreclosure Prevention Alternatives, and as updated by subsequent announcements.

Advertisements

2 Responses to Fannie Mae Retires Payment Reduction Plan Program

  1. Affordable Virtual Assistant…

    […]Fannie Mae Retires Payment Reduction Plan Program « Teamwork Program's Blog[…]…

  2. You precisely saved me at least 1 hour of time. I am making a project in this particular topic and your contribute has helped me through one of the topics of my project. I will browse to the other pages now.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: