From The Desk Of Laura Wheeler

As if the Mortgage Industry has not been through enough in the past year, more changes are in store.

Come December 15^th, borrowers will have an opportunity to help themselves out of bad situations, but only if they take action.

If you are behind on your mortgage payments, call your lender now. Waiting will only make the situation worse. And, if you don’t make the lender aware that you want to be in line for the restructuring your loan, they will not come looking for you.

Same goes for those who think they might fall behind on their loan payments. If you have lost your job or are bringing home less because of commission sales or shortages, let your lender know now.

Another change coming to the industry is the qualifying process is going to be changing. Instead of the standard, cumbersome, loan modification process, which can include reviewing a borrower’s credit report and tax returns, the new plan focuses on the borrower’s income and how much he or she can afford to pay. It also creates a formula for determining what a homeowner can afford, eliminating some guesswork.

Government officials said they expect the effort, dubbed, the Streamlined Modification Program, to be able to help “hundreds of thousands” of homeowners.

Neel Kashkari, interim assistant Treasury secretary for financial security says, “We are experiencing a necessary housing correction, and the sooner we work through it, the sooner housing can again contribute to our economic growth”.

Keep in mind, the program applies only to mortgage owned or guaranteed by Fannie Mae and Freddie Mac, which are involved with more than 50 percent of residential loans. But major lenders – including Bank of American, Wells Fargo and Citigroup – have agreed to apply the formula to loans the administer for Fannie Mae and Freddie Mac and are expected to extend it to their own loans.