The Treasury Department recently announced two updates to its Making Home Affordable (MHA) Program, expanding it to help create a more comprehensive approach to combating foreclosures and stabilizing the housing market. 

On May 14, Treasury expanded MHA foreclosure prevention alternatives to include the use of short sales and deeds-in-lieu of foreclosure. These options are targeted to borrowers eligible for a Home Affordable Modification, but unable to complete the modification process. Additionally, new home price decline protection incentives were introduced to partially offset investors' risk of loss for modifications made in areas with falling home prices.

On April 28, Treasury announced a second lien program with a goal of lowering payments on second mortgages for struggling homeowners as well as other measures to help underwater borrowers stay in their homes. The initiative is complementary to the existing Home Affordable Modification Program (HAMP) as up to 50% of at-risk mortgages eligible for HAMP are reported by Treasury to have second liens.

We're currently working through the policy and operational details of each program in coordination with the Treasury Department and other stakeholders, and expect to issue a Fannie Mae Servicing Guide Announcement for each program in July. For non-GSE loans, we're assisting Treasury with the development of "Supplemental Directive" announcements containing program details that will be posted on HMPadmin.com for servicers. 
 

To view the May 14th Press Release from the US Dept. of the Treasury, please click here.