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October 28th, 2010 (Modified on October 29th, 2010)

Message to HAMP Servicers: Remember your requirements



If you ask a borrower “who is to blame for your HAMP denial?” They’ll likely say the servicer. If you ask the servicer, chances are they’ll say it’s the borrower’s fault. Wherever the proper blame lies, a few things are for certain: the foreclosure epidemic is steady if not rising, and failed modifications are still outnumbering permanent mods.

But as the Treasury Department reiterated this month, it’s the participating servicers who are the ones with the obligation to the borrower. If a borrower doesn’t provide the proper paperwork, then their denial is their own fault; however, “participating servicers are required to certify they tried a variety of solutions including a HAMP modification, a proprietary one, a short sale or some other option to help borrowers avoid foreclosure,” according to National Mortgage News:

On October 6, Treasury reiterated this requirement in guidance to all HAMP servicers.  The guidance also stated that servicers are “prohibited from conducting a foreclosure sale until the HAMP-required written certifications have been issued to foreclosure counsel or the trustees,” according to Phyllis Caldwell, chief of Treasury’s Homeownership Preservation Office.

More recently, Treasury ordered a review of the “10 largest servicers’ internal policies and procedures for completing the pre-foreclosure certifications,” Caldwell told the Congressional Oversight Panel, which oversees the Troubled Asset Recovery Program.

The Treasury is trying to get tougher

The Government Accountability Office (GAO) ripped the Treasury Department in a June 24 report, claiming that the Treasury had yet to fine a single mortgage loan servicer for HAMP noncompliance, despite the thousands of complaints from homeowners and housing counselors, lawsuits seeking class action status, and individual states themselves, several of which are proposing laws to enforce HAMP compliance.

To this point, the Treasury’s enforcement of the rules has been limited to prodding servicers to do better and requiring them to review borrowers’ applications. It’s unclear yet if this new “review” of the nation’s 10 largest servicers will result in anything more.

You can reapply for HAMP

As long as you weren’t denied a HAMP loan modification because you failed to make your trial mortgage payments on time, you can reapply. You are entitled to get the reason that the mortgage servicer declined your request; if you can show that the servicer’s numbers or information is incorrect, or that your circumstances have changed, you get to reapply for HAMP. Some non-Fannie Mae or Freddie Mac lenders, however, only allow one crack at HAMP, and unfortunately, they get to make up their own rules.

If you decide to take another run at HAMP, look for the required forms on your lender’s website, or download a HAMP application package from www.hmpadmin.com. Be sure to tell your lender that you are reapplying for HAMP, and continue to pay your modified trial payment during the process. Call weekly to make sure that your mortgage servicer has received the new application package. Carefully document every call, and call after every fax to verify that the paperwork has been received and that it is what was requested. Then the fun begins all over again.

Have you been denied a HAMP modification? If so, let us know!

Leave us a comment below, we want to hear your story.

(Gina Pogol contributed to this blog post)

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4 Responses to “Message to HAMP Servicers: Remember your requirements”

  1. Tweets that mention Message to HAMP Servicers: Remember your requirements | HSH Financial News Blog -- Topsy.com Says: October 28th, 2010 at 4:23 pm

    [...] This post was mentioned on Twitter by HSH Associates, Brett Robbins . Brett Robbins said: Message to HAMP Servicers: Remember your requirements: by Tim Manni If you ask a borrower “who is to blame for you… http://bit.ly/dbWjAU [...]

  2. Sherry Moos Says: January 23rd, 2011 at 9:46 am

    It has taken nearly a year for our HAMP application to get thru our lender, Wells Fargo. We have had to provide the same paperwork every sixty days. Finally, a week ago we were told that we were denied. We have asked for an explanation as to why and we were told that they do not have to give us one, but that we can reapply. How do consumers know if their loans are really being considered or are we just being shuffled thru the system time and time again.

  3. Tim Manni Says: January 28th, 2011 at 1:43 pm


    It’s so hard to know…at least borrowers must submit their paperwork before being considered for the program (which helps gauge qualifications), but unfortunately we’ve heard countless stories like yours. The problem is that these lenders are sooo swamped and borrowers don’t get to communicate with the same person throughout the process.

    Keep your head up, keep us posted,

  4. HAMP Mods Slowing, Outnumbered by Rejections and Cancelations | Welcome to propertiesandnotes.com Says: February 9th, 2011 at 6:45 pm

    [...] Message to HAMP Servicers: Remember your requirements (hsh.com) [...]

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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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