08-31-2009, 07:09 PM
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Join Date: Aug 2009
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Nominated 0 Times in 0 Posts TOTW/F/M Award(s): 0 | HAMP Update August 26,2009
This is information pulled directly from Fannie Mae. This may give some of you in the trial mod more insight. Hope this helps. HAMP UPDATE August 26, 2009
Critical Home Affordable Modification Program Waiver Granted to Participating Servicers Effective today, a new critical Home Affordable Modification Program (HAMP) Waiver is granted to participating servicers, as detailed below. Temporary HAMP Waiver for Extension of the Trial Period for Borrowers with Trial Period Plan Effective Dates of 9/1/09 or Earlier #20090803 On April 6, 2009, we issued Supplemental Directive 09-01 to HAMP servicers which, among other things, provided that servicers could consider a HAMP offer to have expired if the borrower does not return the required documentation within 60 days of the offer being made by the servicer. This guideline was reiterated in Supplemental Directive 09-03, dated July 6, 2009. Since issuance of this guideline, we have discovered that numerous borrowers have made their required trial period payments but have not submitted all required documentation by the applicable deadline. During this period of program implementation and stabilization, borrowers in this situation should be given a longer period of time to provide the necessary documentation. Accordingly, a temporary waiver is being granted to allow servicers to grant the borrower an extension of his or her trial period. Servicers should take reasonable steps to obtain all required documentation from a borrower prior to the expiration of the trial period. However, if a borrower with a Trial Period Plan Effective Date of September 1, 2009 or earlier has made all required trial period payments under his or her Trial Period Plan but has not provided all documentation and executed legal documents required under HAMP by the last day of the trial period, the servicer may grant the borrower an extension of his or her trial period by up to two months ("Trial Period Extension") to submit missing or incomplete documents. Servicers must treat similarly situated borrowers consistently when exercising the option to grant Trial Period Extensions.
The servicer must send written notification to the borrower regarding the Trial Period Extension. The notification must be sent by the servicer within five business days following the end of the trial period and include the following statements/information:
The servicer has not received all of the documentation necessary to complete the HAMP modification.
A list of the document(s) that, as of the date of the notification, have not been received by the servicer and are required for determining HAMP eligibility.
The borrower has qualified for a one-time Trial Period Extension in order to submit the missing documentation since he/she has made all three payments in the trial period.
The borrower must return all missing documentation and make additional trial period payments by the end of the Trial Period Extension.
If the borrower does not provide the missing documentation or does not make the additional trial period payments prior to the end of the Trial Period Extension, the borrower will not receive a HAMP modification and will not be eligible for consideration under HAMP in the future.
Borrowers will be required to make trial period payments during the Trial Period Extension. Servicers should apply the additional trial period payments in the same manner in which the original trial period payments are applied, consistent with Supplemental Directive 09-01. Servicers may apply the guidance provided in Supplemental Directive 09-03 with respect to trial period payments received after the servicer’s cutoff date to trial period payments due during the Trial Period Extension.
If the servicer receives all of the borrower’s missing documentation and the borrower’s additional trial period payments prior to the end of the Trial Period Extension, the borrower will receive a HAMP modification. Please remember that the borrower’s documentation supporting income and property valuation used in the NPV calculation may not be more than 90 days old as of the date the servicer is determining HAMP eligibility.
If the servicer does not receive all of the borrower’s missing documentation and the borrower’s additional trial period payments prior to the end of the Trial Period Extension, the borrower will fail the trial period, will not receive a HAMP modification and will not be eligible for consideration under HAMP in the future.
Borrowers and servicers will accrue "pay for performance" principal balance reduction payments and "pay for success" fees, respectively, for each month of the Trial Period Extension as long as the servicer receives all required documentation and the additional trial period payments, and the HAMP modification becomes effective.
Servicers are reminded that, as provided in Supplemental Directive 09-01, each borrower must submit a signed IRS Form 4506-T to the servicer and, when available, a signed copy of his or her most recent tax return. If the borrower is unable to fulfill the tax return requirement, the servicer must submit the signed Form 4506-T to the IRS for processing. If the borrower provides the required tax return, the servicer must retain the signed Form 4506-T in the borrower’s file and may be required to submit it to the IRS if requested to do so by Freddie Mac, the program compliance agent. In addition, a servicer should continue to follow its standard practices for fraud control, which may include submitting the IRS Form 4506-T in specified circumstances. Any conflicts that arise should be addressed in accordance with guidance provided by Freddie Mac.
Note: If a borrower submits unsigned tax returns, but provides evidence that the returns were electronically filed, evidence of the electronic filing satisfies the signed tax return requirement.
Supplemental Directive 09-01: Home Affordable Modification Guidelines
Supplemental Directive 09-03: Trial Period Guidance
Questions? This message was sent via email to servicer representatives registered for HMPadmin.com on effective date at top of the message.
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