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June 1st, 2010

Update1: Changes to HAMP: Docs Required Upfront

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Update1: These changes to the HAMP program (see ‘original post’ below) begin today. Servicers can now only review a mod application after a borrower has provided all the required paperwork.

According to Making Home Affordable, here is the new protocol:

Step One: Provide your servicer with the following “initial package” of documentation:

  • Request for Modification and Affidavit (RMA) Form,
  • IRS Form 4506-T or 4506T-EZ, and
  • Evidence of Income

Step Two: Your service must respond to you within 10 days. “The servicer must acknowledge in writing the borrower’s request for HAMP participation by sending the borrower confirmation that the Initial Package was received, and a description of the servicer’s evaluation process and timeline.”

Step Three: “Within 30 calendar days from the date an Initial Package is received, the servicer must review the documentation provided by the borrower for completeness. If the documentation is incomplete, the servicer must send the borrower an Incomplete Information Notice in accordance with the guidance set forth in the ‘Incomplete Information Notice’ section below. If the borrower’s documentation is complete, the servicer must either”:

  • Send the borrower a Trial Period Plan Notice; or
  • Make a determination that the borrower is not eligible for HAMP and communicate this determination to the borrower in accordance with the Borrower Notice guidance provided in Supplemental Directive 09-08.

Click here if you wish to read the full details.

Original Post (published on 01/28/10): We can’t begin to tell you how many stories we have read from borrowers who say that they have waited months in limbo, unsure if their loan mod application has been or will be accepted into permanent status. Many borrowers have finished paying their three required trial payments, and still have not heard any news back from their lender.

Here’s the latest comment we received from our reader Troy who’s in that exact situation:

Wow I submitted my necessary paperwork to my lender on March 24, 2009 and still as of today haven’t got an answer as to whether or not I qualify. My trial period payments have been made and am paying my original loan amount until I hear back from my lender. I have heard not many are getting approved for various reasons.

As a way to improve upon this dilemma, the Treasury Department released updated guidance for servicers, that will enable them to “transition borrowers more quickly and easily from trial to permanent modification,” said HUD Senior Advisor for Housing Finance William Apgar.

Beginning on June 1, 2010, servicers can only review a mod application after a borrower has provided “an initial package that includes a request for modification and affidavit (RMA) form; the Internal Revenue Service (IRS) 4506T-EZ form, which gives servicers the ability to pull the borrower’s tax return; and two pay stubs from the borrower for proof of income,” according to HousingWire.com.

Ten days after receiving the package of documents (described above), the servicer must “acknowledge the request.” After that time, the servicer then has 30 days to inform the borrower whether or not their application for a trial mod has been granted or denied.

Too many borrowers like Troy have been automatically granted trial mods only to left hanging for months on end, unaware of whether they’ve been given a permanent mod or not, or what their monthly payment should be.

Here are the new guidance details directly from Treas.gov:

Supplemental Directive 10-01 provides guidance on two major issues:

1)New Requirements that Documentation be Provided Before Trial Modification Begins

Today’s guidance refines the documentation process and makes it easier for eligible borrowers in trial modifications to get permanent modifications quicklyUnder this guidance:

A simple, standard package of documents will be required prior to the servicer’s evaluation of the borrower for a trial modification.  This process will be required for all new HAMP modifications that became effective after June 1, although mortgage servicers may implement it sooner.

2) Converting Borrowers in the Temporary Review Period to Permanent Modifications

In December, Treasury implemented a review period through January 31 to provide servicers additional time to collect and submit missing documentation for borrowers in trial modifications, to require that borrowers be notified of any missing documents, and to give borrowers an opportunity to dispute and correct any erroneous information in their applications.Today’s guidance clarifies for servicers the proper procedures for conversion of those borrowers who are current on their monthly payments to permanent modifications.

“This should improve the success rate for trial-to-permanent modifications, but will also simultaneously weed out ineligible borrowers at the start of the the process,” said HSH VP Keith Gumbinger. “However, it may ultimately increase deed-in-lieus, short sales, and foreclosures since ineligible borrowers won’t even get trial mods.”

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18 Responses to “Update1: Changes to HAMP: Docs Required Upfront”

  1. Tim Manni Says: February 1st, 2010 at 12:32 pm

    I wanted to share another comment we received from a reader named Tom. His experience in the HAMP program is precisely why Washington made changes to their mod program. Here is Tom’s comment that he left on Sunday on post we wrote months ago:

    “The Making Home Affordable experience for me has been nothing but frustrating. Dealing with Bank Of America since May 2009 and I was finally “qualified” in December. Yet Bank Of America has sent no paper work or confirmation of adjusted amount or time frame. I call once a week and get a different story from everyone I speak to. I’ve begun to wonder that since I had mortgage insurance whether BOA has no interest in really helping since the bank stand to lose anything.”

  2. Is the Home Affordable Modification Plan(HAMP) plan for you? | Burbank Real Estate Report Says: February 6th, 2010 at 3:47 am

    [...] <!– /* Font Definitions */ @font-face {font-family:SymbolMT; panose-1:0 0 0 0 0 0 0 0 0 0; mso-font-charset:0; mso-generic-font-family:auto; mso-font-format:other; mso-font-pitch:auto; mso-font-signature:3 0 0 0 1 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:”"; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:”Times New Roman”; mso-fareast-font-family:”Times New Roman”;} a:link, span.MsoHyperlink {color:blue; text-decoration:underline; text-underline:single;} a:visited, span.MsoHyperlinkFollowed {color:purple; text-decoration:underline; text-underline:single;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} –> There was a great article written in the LA Times about the new changes to the HAMP or Home Affordable Modification Plan by the US Department of the Treasury and the US Department…. [...]

  3. KCM Weekend Library Links Says: February 6th, 2010 at 8:00 am

    [...] Changes to HAMP: Docs Required Upfront [...]

  4. Kathy Bateman Says: February 12th, 2010 at 2:55 am

    I have been dealing with Bank of America since January of 2009, refused to help then received a modification pkg in May paid sent in all paperwork and have been making payments since this time and as of January 2010, I told BOA I will not be making anymore trial payments. I don’t know what everbody else’s agreement says, but mine said no upfront fees and stated that before the end of my three month trial period they would finalize your modified loan terms and send you a loan modification. According to BOA’s website Under Workout Information, I was showing approved for over three month and it also stated that there would be upfront fees to pay them. Then on January 20th, it said I was Under Review, That day when I told my negotiator that my payment for January 2010, was my last payment. up on That night my workout information went from Under Review to Cancelled do to a borrower on the account saying they no longer wanted assistance. I’m the only borrower on this account. Of course, I have them all these documents printed out the emails back and forth will different people saying I was approved back in August to my negotiator telling me in an email in October of 2009, that I would receive the documents within 3-4 weeks. I and will continue to see what can be done, but I will not give them another dime and whether I lose my house or not, I will not give up trying to expose this fraud and those of you in the same boat shouldn’t either. Visit my web site at http://boamhaloanmod.com.

    Kathy Bateman
    Los Angeles, CA

  5. Tim Manni Says: February 12th, 2010 at 10:56 am

    Kathy,

    Thanks for sharing — we can’t tell you how many of these similar stories we have heard. What is it about Bank of America? Nearly every hardship story surround HAMP we hear about seems to somehow involve BofA.

    Best of luck Kathy, keep us posted,
    Tim

    ***BTW, your link doesn’t work***

  6. BOA homeowner Says: February 17th, 2010 at 9:14 pm

    Now working full time so had to scale back full time job of trying to get permanent modification completed. BOA continues same techniques: claims it doesn’t have documents, claims payments missed. When confronted with paper trail then claims to have sent file to Loss Mitigation. Well that was over a month ago. I thought the gov’t required BOA to SH*() or get off the pot by the end of January 2010? Still waiting for: permanent modification from BOA, letter of correction from BOA to Freddie Mac that states I did not have a missing mortgage payment during my modification period, updated year end form that correctly shows payments made since modification and how they were applied to monthly payments.

  7. DLR Says: February 24th, 2010 at 9:48 am

    My experience with Bank of America has been frustrating at best. I am on unemployment and in my home for 15 years. I have run through savings and most of my IRA. I asked for a modification under HAMP (also called MHA) on October 4th and told to wait for the ‘package’ that would be sent to me within 45 days. For the last 4 and a half months, I have spent countless hours on the phone with BofA and never received ‘the package’. December 28th, 2009 I received a letter stating escrows will begin February 1st (increasing my payment to $1500 a month from $916) and I owed $2,000 for the first installment of 09 pay 10 real estate taxes by February 1st. No other explanation. I was told on the phone that the Making Homes Affordable program requires escrow. Well, that would have been fine except I never escrowed taxes or insurance and they changed the terms my loan without any written explanation or documentation (let alone the now infamous MHA ‘package’). On February 8th, a very kind loan officer from BofA took pity on me and tried calling about it. Two hours and 8 people later she was still trying to explain that they couldn’t change my mortgage without sending me something in writing – like the trial modfication ‘package’. Or at the very least push back the escrows until I did get my package. They said they would try and I should receive my package within 10 days or so. February 11th BofA actually called to say they were pushing back the escrows and I should be receiving my package shortly. When I called the 24th, BofA told me that I was ineligible MHA because they couldn’t change the terms of my mortgage and the interest rate I had (5.85) was as low as I could get. Oh, and I can’t reapply.

    Washington are you listening to our stories? Are you so far removed from reality that you can’t see what is happening to your constituents? Stop arguing amongst yourselves and work together for goodness sakes. Try to get something worthwhile done…

  8. Tim Manni Says: February 25th, 2010 at 11:11 am

    DLR,
    What a mess! That sounds like one huge ball of confusion — the right hand doesn’t know what the left is doing!

    “Washington are you listening to our stories?”: I sure hope so!

    Keep us posted, and good luck,
    Tim

  9. PAMELA SUE MONROE Says: March 9th, 2010 at 1:06 pm

    Ditto..to all of the problems stated above with Bank Of America..my paperwork has been submitted 4 times..my negotiator does not return calls or answer phone..maybe your company will have better luck with him, his name is Jeremy Roberts (972)498-6701..no one at BAC seems to know what is going on with my mortgage modification..I’ve been in limbo since July 2009..I send in payments but they are not being applied to my loan..any suggestions??

  10. Tim Manni Says: March 9th, 2010 at 4:29 pm

    Pamela,

    You may interested to read the comments by “Z Burkett” on our post titled “Update3: Loan Mods: Submit ALL Your Paperwork!

    According to him, he has found success in the loan mod process by going about it in a different way. His comments may be worth reading.

    Thanks,
    Tim

  11. Clair James Says: April 9th, 2010 at 3:09 pm

    Thanks article – I dont normally post on blogs much but this is good article, keep up the good work, ill pass this on to my friends.

  12. Kim Burton Says: May 12th, 2010 at 6:06 pm

    I have tried to get a loan modification with Chase since 12-31-09. Turns out you aren’t eligible if you get unemployment! I can have a 6 month reduction but these jokers keep losing my faxed paperwork and just really don’t care. They are HORRIBLE and for the stress it causes, a 6 month reduction is simply not worth it! They could care less whether or not I get any help! And Chase’s Making Home Affordable program is totally different than their Home Preservation Dept that I got sent to after I called the (888) 995-HOPE # on MHA.gov website. That sent me to the CCCS of Greater Dallas and a very helpful woman contacted Chase for me and gave me the totally different HPO – home preservation office. If anyone needs it their Chase’s email address (yes, one nice person told me I could scan and email my docs! One out of 80 I talked to) is hpo.chase@chase.com, their phone # is 866-326-0086, and fax is 866-931-9938. Good luck; must say I still have no answer but this home preservation dept does seem to be nicer now that my CCCS counselor contacted them. And I’m in GA so the CCCS contact in Dallas was all done over the phone. She is the ONLY one who told me I could not get remodified due receiving unemployment! Chase turned me down the first time because – get this – I wasn’t 2 months behind on my mortgage! Don’t let them fool you! DO NOT become 2 months behind or they will foreclose on you! They are a band of gypsies, playing free & lose with this program, and after my final attempt at emailing them their forms today I OFFICIALLY GIVE UP.

  13. Tim Manni Says: May 13th, 2010 at 9:25 am

    Kim Burton,

    So sorry to hear about your struggles — you’re certainly not alone. According to the official rules, you can qualify for HAMP if you’re unemployed. Here are a few links for you:

    http://makinghomeaffordable.gov/borrower-faqs.html (#s 21 and 51)

    http://blog.hsh.com/index.php/2010/03/once-again-there-are-changes-to-hamp/

    Hope these help,
    Tim

  14. Tweets that mention Update1: Changes to HAMP: Docs Required Upfront | HSH Financial News Blog -- Topsy.com Says: June 2nd, 2010 at 12:06 am

    [...] This post was mentioned on Twitter by HSH Associates, Russell Bradchulis. Russell Bradchulis said: Update1: Changes to HAMP: Docs Required Upfront | HSH Financial …: I was told on the phone that the Making Homes… http://bit.ly/9cNN5R [...]

  15. Judy Says: August 23rd, 2010 at 2:31 pm

    Listening to the stories above make me feel helpless. I supposedly did get a modified loan from B of A. But my monthly payments keep going up! I call and speak to different people in different departments and they all have a different answer for why this is happening. Some say it’s due to my escrow acct others say I didn’t make a payment and some say it’s due to the late fees for payments that were posted after the 16th. I explain to them that I sent in all payments by the 6th but B of A sometimes wouldn’t post it until the 22. I would actually call to see if they recieved it and the rep would say yes, not to worry they recieved it on the 9th and would post it soon. So now I have to pay monthly late fees on “ALL” of those supposed late payments. I HATE B of A!! Am I the only one who they are doing this too??

  16. Tim Manni Says: August 23rd, 2010 at 3:43 pm

    Judy,

    You need to keep careful documentation of who you talked to, when and what they told you so can fight these late fees. That just sounds wrong to me.

    Anyone else in Judy’s situation?

    Thanks for commenting,
    Tim

  17. Malka Says: December 22nd, 2010 at 1:40 pm

    I’m currently working with NACA, they are great. However loses paperwork from time to time. May I ask if I should return calls from Chase or speak with Naca directly?

  18. tcone Says: February 22nd, 2011 at 8:47 am

    THis is a great guide:https://www.hmpadmin.com/portal/programs/docs/hamp_servicer/mhahandbook_30.pdf

    you can find out how you can escalate your case with the Treasury. Call 1 x per week. If you get the underwriters number in caller id write it down and call them also once a week. That is 2 calls minimum. Also don’t be afraid to cite the guidlines of HAMP if they are processing your file under HAMP. There are timelines they must follow in order to complete the file and get compensated. Read this guide, it is worth it. You may not understand a lot, but it does answer what you should expect and be on top of it. After your 3rd trial payment be calling to find out when your docs are being sent under the guidlines of the program. DON’t BE SHY, GET ARMED WITH INFORMATION

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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