Except in “foreclosure restart states” as described in Q54 below, any foreclosure sale must be suspended and no new foreclosure action may be initiated during the Trial Period, including any period of time between the borrower’s execution of the Trial Period Plan and the Trial Period Plan effective date. Foreclosure actions may not be initiated or restarted until the borrower has failed the Trial Period Plan and the borrower has been considered and found ineligible for other available foreclosure prevention options.
Q55. What rules apply to loans that were in active foreclosure in foreclosure restart states prior to initiation of the Trial Period Plan? Will borrowers be considered to have failed the Trial Period Plan if they are not current at the time the foreclosure sale is scheduled? How could such borrowers be current if foreclosure was already in process?
Due to unique foreclosure law requirements in Georgia, Hawaii, Missouri, and Virginia, borrowers in these states who were in active foreclosure prior to executing a Trial Period Plan will be considered to have failed the Trial Period Plan and servicers may proceed with the foreclosure if either
(a) the servicer determines that the borrower made a misrepresentation under Section 1 of the Trial Period Plan
(b) the borrower has not made all required Trial Period payments through the end of the month preceding the month in which the foreclosure sale is scheduled to occur.
Q56. When a borrower is placed in a Trial Period Plan, does the loan information need to be changed on the servicer’s system and the investor’s system to reflect the Trial Period terms?
No, scheduled loan terms in servicing systems should not be modified during the Trial Period. However, servicers must follow the requirements for reporting to the credit reporting agencies during the Trial Period as set forth in Supplemental Directive 09-01 and discussed below in