Modifications,Short Sales,Deeds in Lieu,WriteDowns

MHA Mod New Guidance From Treasury

Posted on Thursday, January 28, 2010

"The updated process requires that key documents, including proof of income, be obtained from the borrower before a borrower evaluation can begin. This more robust requirement of upfront documentation will make it easier and quicker to convert trial modifications to permanent modifications and enable servicers to use their resources more effectively.


Guidance Details

Supplemental Directive 10-01 provides guidance on two major issues:

1) New Requirements that Documentation be Provided Before Trial Modification Begins

Today’s guidance refines the documentation process and makes it easier for eligible borrowers in trial modifications to get permanent modifications quickly. Under this guidance:

A simple, standard package of documents will be required prior to the servicer’s evaluation of the borrower for a trial modification. This process will be required for all new HAMP modifications that became effective after June 1, although mortgage servicers may implement it sooner.


2) Converting Borrowers in the Temporary Review Period to Permanent Modifications

In December, Treasury implemented a review period through January 31 to provide servicers additional time to collect and submit missing documentation for borrowers in trial modifications, to require that borrowers be notified of any missing documents, and to give borrowers an opportunity to dispute and correct any erroneous information in their applications. Today’s guidance clarifies for servicers the proper procedures for conversion of those borrowers who are current on their monthly payments to permanent modifications."


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