HAMP Loan Modification Process Gets Much Needed Overhaul
HAMP loan modification gets overhaul
Many struggling homeowners are frustrated by trying to get a loan modification from their lender. However, with the new federal loan modification process (HAMP) begun last month, borrowers have cause to rejoice.
It appears that the Federal Treasury Department has reacted to a dismal nationwide low rate of permanent modifications being offered to struggling homeowners facing foreclosure by implementing a more streamlined process that is supposed to offer far less paperwork and a shorter approval process.
Until now, the federal loan modification plan (HAMP) has a dismal success rate. Concurrently, lenders, loan servicers, borrowers as well as the Treasury Department have all blamed each other for the cause of the low numbers of permanent loan modifications.
With more than over $73 billion dollars currently accessible to fund HAMP, the question arises as to why this money is not being used to help deserving borrowers currently facing foreclosure and the potential loss of their homes? A program that required too much paperwork from borrowers, too many underwriting requirements, and constant revisions to the government guidelines seems to be the culprit.
However, beginning April 5, 2010, new guidelines as well as timelines have been activated with the hope that more homeowners will at least know where they stand in a timely manner.
Homeowners are encouraged to do the following in order to receive their loan modification answer within 30 days of submission:
a. Contact their lender/servicer and request deliberation for HAMP
b. An application package will be mailed out to the borrower, or it can be downloaded on the lender website
c. Homeowners must complete a 3 page application, counting a financial statement detailing their income and expenses. This is important information and will used in evaluating whether the borrower meets the federal approval formula for HAMP.
d. Send in the application along with 30 days of paystubs, a signed Hardship Affidavit, and a signed 4506t form (provided with application)
e. Upon receipt of a COMPLETE loan modification application, lenders now have just 30 days to respond to the homeowner with an answer-either off a loan workout or offer other solutions-such as short sale or deed in lieu of foreclosure.
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1 Comment for “HAMP Loan Modification Process Gets Much Needed Overhaul”
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Required to give an answer in 30 days? Yeah right. When pigs fly.
I’ve been working with Bank of America for over a year now with no difinitive answer.