One of the biggest complaints in attempting to modify your mortgage is the paperwork. Horror stories are everywhere! Currently if your loan is owned or guaranteed by Fannie or Freddie and you are 90 days or more past due, you can be offered a loan modification without all of the paperwork.
This new program begins in July and is only for first mortgages at least 12 months old. The modification would cut the interest rate, extend the payment term, and sometimes cut out a portion of the loan and make it 0% interest.
Freddie and Fannie do not currently allow any principal reduction. Although this program has not yet begun, experts believe that you would still do better requesting a modification under the old process because it is thought that the terms will be better. However, the fast-track application process is much simpler and quicker, and that is a big when you are facing possible foreclosure of your homestead.