At the launch of HAMP (Housing Affordable Modification Program), the Treasury Department and the Department of Housing and Urban Development (HUD) set as their goal the modification of 3m to 4m mortgages. Through December 2009, approximately 850,000 borrowers had been placed into trial modification programs and 66,000 had been placed into permanent modifications. Hardly a blistering pace.
We outlined some of the issues with the structure and deployment of the program in our HAMP Best Practices article published in the December 2009 issue of Servicing Management magazine. Mentioned in that article were the documentation requirements of the program, which slowed the process down. In recognition of this, Treasury and HUD have released new requirements for upfront documents and guidance on permanent modification conversion.
Effective for all trial period plans with effective dates on or after June 1, 2010, a servicer can only evaluate a borrower for HAMP after receiving an initial package that includes a request for modification and affidavit (RMA) form; the Internal Revenue Service (IRS) 4506T-EZ form, which gives servicers the ability to pull the borrower’s tax return; and two pay stubs from the borrower for proof of income.
Said Herb Allison, the assistant secretary for the Treasury: ““We’re making it as easy as possible for homeowners to provide the documents. A lot of the problem of converting the trial mods to permanent mods has been time delay between the verbal communication about their eligibility to actually getting the documents and sending them in.”
Every little bit helps.