HAMP & Foreclosure

[Cocky]

State: GA
Servicer: AHMSI
Last Payment: May 2011

OK, my foreclosure is scheduled for 12/06 but I mailed my completed HAMP app yesterday CMRR. Does anyone here have experience with submitting a HAMP app within 2-4 weeks before foreclosure and, if so, what was the outcome?

If a complete and acceptable HAMP package is received, how long until they will expect the first trial payment?

[Cat Damiano]

Hi Cocky,


The servicer should be following the guidelines and according to the guidelines;


Suspension of Scheduled Foreclosure Sale:

When a borrower submits a request for HAMP consideration after a foreclosure sale date has been scheduled and the request is received no later than midnight of the seventh business day prior to the foreclosure sale date (Deadline), the servicer must suspend the sale as necessary to evaluate the borrower for HAMP. Servicers are not required to suspend a foreclosure sale when: (1) a request for HAMP consideration is received after the Deadline; (2) a borrower received a permanent modification and lost good standing; (3) a borrower received a TPP offer and failed to make one or more payments under the TPP by the last day of the month in which it was due; or (4) a borrower was evaluated based upon an Initial Package and determined to be ineligible under HAMP requirements.

The servicer will not be in violation of this section to the extent that a court with jurisdiction over the foreclosure proceeding (if any), or the bankruptcy court in a bankruptcy case, or the public official charged with carrying out the activity or event, fails or refuses to halt the sale after the servicer has made reasonable efforts to move the court or request the public official for a cessation of the sale. The servicer must document in the servicing system and/or mortgage file if the foregoing exception to the requirement to suspend an existing foreclosure sale is applicable.

A borrower is deemed to have requested consideration for HAMP when an Initial Package is received by the servicer or its foreclosure attorney/trustee prior to the Deadline. However, the servicer may establish additional requirements for requests received later than 30 calendar days prior to a scheduled foreclosure sale date, including, for example, a requirement that the Initial Package be delivered through certified/express delivery mail with return receipt/delivery confirmation to either the servicer or the foreclosure attorney/foreclosure trustee. These requirements must be posted on the servicer’s Website and communicated to the borrower in writing.

If the borrower contacts the servicer prior to the Deadline, the servicer must inform the borrower of the Deadline and any document submission requirements.

Mitigating Foreclosure Impact:

The servicer must take the following actions to mitigate foreclosure impact:

Simultaneous Trial Period Plan and Foreclosure Explanation:

When a borrower is simultaneously in foreclosure and is either being evaluated for HAMP or is in a TPP, the servicer must provide the borrower with a written notification that explains, in clear language, the concurrent modification and foreclosure processes and that states that even though certain foreclosure activities may continue, the home will not be sold at a foreclosure sale while the borrower is being considered for HAMP or while the borrower is making payments under a TPP.

Foreclosure Attorney/Trustee Communication:

Servicers must develop and implement written policies and procedures to provide notification to their foreclosure attorney/trustee regarding a borrower’s HAMP status, including whether the borrower is potentially eligible for HAMP, and whether the borrower is being evaluated for, or is currently in, a TPP. Servicers must ensure that their foreclosure attorney/trustee adheres to all of the requirements with respect to referral to foreclosure, stay of foreclosure actions and suspension of foreclosure sales.

Certification Prior to Foreclosure Sale:

Servicers must develop and implement written procedures applicable to all loans that are potentially eligible for HAMP that require the servicer to provide to the foreclosure attorney/trustee a written certification that (i) one of the circumstances exists, and (ii) all other available loss mitigation alternatives have been exhausted and a non-foreclosure outcome could not be reached. This certification must be provided no sooner than seven business days prior to the scheduled foreclosure sale date (the Deadline) or any extension thereof. In addition, if the servicer is subject to Section 4 of Chapter I, the servicer must consult the relationship manager and obtain affirmation via email or other writing that, to the best of the relationship manager’s knowledge, all available loss mitigation alternatives have been exhausted and a non-foreclosure outcome could not be reached.

[Cocky]

Sounds like I'm on double-secret probation. Seriously though, it sounds as if they can review the package, deny it immediately, and still foreclose on 12/06. This is not good news, but thank you for the information.

[Tarin Myhairout]

That is Precisely what happened to us.

Tarin

[Cat Damiano]

I am sorry if that isn't what you wanted to hear. But according to the guidelines you did get the package to them in enough time to evaluate you and extend the sale date out. Even if you are denied the HAMP modification, they would still have to evaluate you for other home retention options that they offer first and until all the options for home retention have been looked into and they are unable to qualify you for any of them, they would then have to evaluate you for the HAFA options as well.

[Cocky]

That is Precisely what happened to us.

Tarin

Tarin, can you tell me more? How long between when you turned in your HAMP app and the foreclosure? Did it delay it at all...even one month?

[Tarin Myhairout]

Hi Cocky:

Well... the story is there if you go back to my first-ever post; but I am not sure my situation is just like yours.

The servicer in our case did sooo many things wrong that I can't tell you exactly what resulted in the sale happening a few days after they told me it wouldn't. They said that delaying the sale any longer would have made it go 'beyond investor guidelines' for delaying the sale; but that is only one of the many explanations I got, so I don't know the truth.

I want to think the servicers are being more careful now and actually following the rules.

Cat is much more experienced with loan modification than I am, and I would defer to her expertise on this.

Tarin

[Cocky]

So it does sound highly unlikely they will foreclose on 12/06?

[Tarin Myhairout]

Cocky:


I know you desperately want me to tell you it isn't going to happen; and I'm not going to say that.

We live in different states. We have different homes and different stories. We have different servicers. We might have different investors. Even if many of those things were the same, I still couldn't promise you a particular outcome.

If you have spent time on the forum, you know that there are a multitude of stories here. The nature of the beast is that many of us are here are because we have had bad experiences, not good ones. The journey is often long, and there are few clear answers along the way. Many of us don't have any special training, and our knowledge is often gained from our own experiences and circumstances, and may have no application beyond our own situations.

It would be irresponsible of me to promise you an outcome, and it would be irresponsible of you to rely on my promises. Why would you listen to me? I have been part of this Forum for less than a month: a rank amateur.

The best we can do for one another is offer our support, ideas and experiences. Then you evaluate your situation, and decide your own course of action.

It can be helpful to write down your options and construct a 'what if' plan of action ahead of time so you don't have to make decisions on the fly. (This isn't my advice, it came from Freedomwon who is much more knowledgeable than I, but it sounds right to me)

Since you have a bankruptcy attorney, maybe run the ideas past her first so you don't compromise your bk case or unnecessarily limit your options.

I hope things go well for you - that is what we hope for all Forum Members.

Let us know how things go.

Regards,

Tarin