Federal Home Loan Mortgage Corporation Foreclosure Defense

The Federal Home Loan Mortgage Corporation, more commonly known as Freddie Mac, is a newer counterpart to Fannie Mae, being established in 1970. Like Fannie Mae, Freddie Mac is also a contributor to the liquidity of the mortgage market. The difference is that Fannie Mae purchases mortgages from large commercial banks, while Freddie Mac purchases mortgages from smaller financial institutions. While Freddie Mac is not as large as Fannie Mae in terms of assets and income, the agency has more equity and revenue.

Freddie Mac, like Fannie Mae, purchases loans from lenders with money the lenders can then use to provide more loans. Freddie Mac also bundles its mortgage loans into mortgage-backed securities that they sell to investors. In exchange for a fee, investors receive the interest and the principal on the securities. Investors get a return on their investment even if the borrower does not pay.

Financial Hardship Foreclosure Defense

Freddie Mac states on their website that they understand that challenges sometimes arise in life that prevent people from making their mortgage payments. Freddie Mac outlines different options for people who are experiencing financial hardship. The agency defines financial hardship as anything that makes it difficult to pay a mortgage in a timely manner, such as divorce, job loss, a natural disaster, or an illness.

Financial hardships that will end within 12 months are considered short-term. Any financial hardship that will extend beyond 12 months is classified as long-term. The reason for the financial hardship, as well as the length you expect it to extend, will impact the solution that is best to avoid foreclosure in a case.

Options to Avoid Foreclosure

Freddie Mac offers many options on their website to avoid foreclosure. These include:

• Forbearance: Forbearance is an agreement between your loan servicer and you that reduces or pauses your monthly mortgage payments for a short period of time. If you cannot make your mortgage payments right now but you believe you will be able to afford them soon, forbearance may be a good option for you.
• Payment deferral: A payment deferral will move any mortgage payments you have missed to the end of your loan term. A payment deferral will not change the amount of the payment you are responsible for paying. If the financial hardship is over but you cannot repay the missed payments at the moment, a payment deferral may be the right option for you.
• Freddie Mac Flex Modification: Like other financial institutions, Freddie Mac offers a loan modification option. For those eligible, the Freddie Mac Flex Modification provides borrowers with a mortgage reduction of up to 20 percent. The reduction will change one or more of the original terms of the mortgage such as the term of the mortgage or the interest rate.
• Repayment plans: A repayment plan causes your monthly mortgage payment to increase for a short period of time. The increase allows you to repay any payments you have missed and once you are current with the loan, the mortgage payments return to what they once were. Repayment plans must extend for more than one month, but cannot be any longer than 12 months. If you can afford your current mortgage payments with a small increase, a repayment plan may be right for you.
• Partial reinstatement: A partial reinstatement allows you to pay a large lump sum to cover a portion of the missed mortgage payments. Your loan servicer will then work with you to create a repayment plan that will cover the rest of the missed mortgage payments.
• Full reinstatement: A full reinstatement allows you to pay a larger lump sum to cover all of the missed mortgage payments. This will bring your mortgage current and you will no longer be in fear of foreclosure.
• Refinancing: You may be able to lower your interest rate by refinancing your mortgage. If it is more affordable, you may also be able to replace an adjustable-rate mortgage with a fixed-rate mortgage.

Eligibility Requirements for a Freddie Mac Modification

Not all borrowers who have a Freddie Mac mortgage are eligible for a modification. To qualify, you must meet the following eligibility requirements:

• You are experiencing financial hardship that makes it difficult to pay your mortgage
• Freddie Mac owns the first mortgage
• You own the home and it is your primary residence
• You have had a mortgage owned by Freddie Mac for at least 12 months
• You have not exceeded the modification limits determined by Freddie Mac
• All borrowers on the loan agree to the modification

Federal Home Loan Mortgage Corporation Foreclosure Defense

Fortunately, there are many common defenses used in foreclosure lawsuits. When the home loan is allegedly owned by Freddie Mac, one of the defenses used most often is forcing the agency to prove that they own the loan. Again, Freddie Mac does not directly provide loans to homeowners. Instead, they purchase them from smaller lenders throughout the country. During these transactions, important documents are sometimes lost, and that makes it impossible for Freddie Mac or another institution to prove that they own the loan.

If a financial institution or Freddie Mac cannot prove that they own the loan, that can serve as a foreclosure defense. If either does not have the title or the note, they do not have any standing to file a foreclosure lawsuit. That is, they have nothing to win or lose through a lawsuit and so they are barred from filing one. If Freddie Mac or any lender cannot prove that they own the loan, it can protect you from foreclosure while also allowing you to stay in the home.

Call Our Foreclosure Defense Lawyer in Fort Lauderdale Today

If you are worried about Federal Home Loan Mortgage Corporation foreclosure, it is important to speak to a Fort Lauderdale foreclosure defense lawyer about your options. At Loan Lawyers, our seasoned attorneys can explain what they are, help you determine which one is right for you, and give you the best chance of avoiding foreclosure. Call us now at (954) 523-4357 or contact us online to request a free consultation.