Federal Home Loan Bank Loan Modifications

Recently I spoke with a Hud counselor connected to the Making Home affordable program. They advised me based on my situation I should be a  candidate for a loan modification under the Making Home Affordable program guidelines and that I should contact my loan servicer.

I did so and my loan servicer has indicated that my loan is owned by FHLB or Federal Home Loan Bank and that there not participating in the modification program.

I have not missed any payments or been late but time is running short and my liquidity is running dangerously low. Im still employed (albeit lower income) and could probably stay in my home with a modification.

Any suggestions?

Thomas

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Hello Thomas,

An excerpt from the Executive Summary of the Homeowner Affordability and Stability Plan release in February 18, 2009 regarding loan modifications (emphasis mine):

“Institute Clear and Consistent Guidelines for Loan Modifications: Treasury will develop uniform guidance for loan modifications across the mortgage industry, working closely with the bank agencies and building on the FDIC’s pioneering work. The Guidelines will be used for the Administration’s new foreclosure prevention plan. Moreover, all financial institutions receiving Financial Stability Plan financial assistance going forward will be required to implement loan modification plans consistent with Treasury Guidance. Fannie Mae and Freddie Mac will use these guidelines for loans that they own or guarantee, and the Administration will work with regulators and other federal and state agencies to implement these guidelines across the entire mortgage market. The agencies will seek to apply these guidelines when permissible and appropriate to all loans owned or guaranteed by the federal government, including those owned or guaranteed by Ginnie Mae, the Federal Housing Administration, Treasury, the Federal Reserve, the FDIC, Veterans’ Affairs and the Department of Agriculture.”

The Federal Home Loan Bank is a government-sponsored enterprise and would certainly fall within the scope of the Homeowner Affordability and Stability Plan.  They may not be paying much attention to you because you haven’t missed a payment.  I’m definitely not saying that you should miss a payment, but I am saying that the FHLB should be Making Homes Affordable and you were definitely given wrong information.

Further, If you’re at the front-line customer service level then I’d suggest hanging up the phone with the person you spoke with and dialing again to get a different answer.  That’s what I do when I’m talking to the servicing lender’s front-end CSR’s and I’m given an answer that I know is wrong.  Hang up, dial again – press on!

Thanks for the questions and hope this helps.

Paul