The Wall Street Journal announced that the two entities will deploying a new faster paced loan modification program designed to avoid foreclosure.
1. There seems to be some questions about whether the program will allow principle reduction.
2. Will it change the re-default rate which so far has been very high. (I have read that it is around 40% withing the first year. (how many more will default next year)
3. Will these loan modifications - effect the borrowers anti-deficiency protections? (You should probably have a lawyer review your documents to see if you would still be protected by California's anti deficiency laws.)
4. What will be done with second loans?
5. This program is for people who are 90 days late. Before a homeowner allows themselves to be 90 days late, they should determine all of their options.
6. This program does not apply to investment properties.
For more information on Loan Modification.