[Moe Bedard]

It won't guarantee or speed up the process.....they are still working on the initial 400k mods from the original 11 states................ and you would still need to qualify based on income and expenses............


Pay Option ARM borrowers accepting a streamlined loan modification option will have the negative amortization feature eliminated from their loan. For owners of only one residential property who currently have little to no equity in their homes, Countrywide will write-down the principal balance to as low as 95% of the current value of the property to restore an equity position. Based on the Affordability Equation, Countrywide will offer a fully-amortizing modification consisting of:
An optional ten-year interest-only period on the loan; and
Reduction of the interest rate with fixed step annual rate adjustments, subject to an interest rate cap.


Affordability Equation:

Foreclosure Avoidance Budget: The difference between the likelihood and severity of the investor’s projected loss in a foreclosure sale and the likelihood and severity of the investor’s projected loss in the event the borrower were to receive a loan modification and later experience a foreclosure sale.


Affordability Criteria:

To the extent permitted by the Foreclosure Avoidance Budget, borrowers will be offered a loan modification that produces a first-year payment of principal (if applicable), interest, taxes and insurance equal to 34% of the borrower’s income or as close to 34% of the borrower’s income as the Foreclosure Avoidance Budget permits without exceeding 42% of the borrower’s income. For those borrowers who do not escrow taxes and insurance, we will offer a loan modification that produces a first-year payment of principal (if applicable) and interest equal to 25% of the borrower’s income, or as close to 25% of the borrower’s income as the Foreclosure Avoidance Budget permits without exceeding 34% of the borrower’s income.

Failure to Qualify under the Affordability Criteria: Borrowers in participating states who do not qualify under the Affordability Equation may be eligible for a payment under the foreclosure relief program and/or relocation assistance.