....if things do not go their way on December 31st
That is when 375,000 loan modifications will have completed the three month trial period required under the Home Affordable Modification Program (HAMP) designed to keep homeowners out of foreclosure. Nobody knows how many homeowners will actually be able to transition from the trial into a permanent loan modification.
At the moment, they are not happy with how many homeowners were able to transition to a permanent loan modification. More than 900,000 homeowners were/are on trial programs and just a handful were able to convert to a permanent loan modification.
Las week, the Treasury kicked off a "Mortgage Modification Conversion Drive" to increase the rate of permanent modifications. Here are the steps they will take....
*Streamlining the application process with standardized paperwork to make it easier for both borrowers and servicers to complete and evaluate the application.
*Publishing servicer-specific conversions rates starting with the next public report.
*Punitive measures against servicers including withholding incentive payments.
*Increased communication with servicers including a meeting last Monday focused on conversion issues.
*Requiring each servicer to report twice daily on conversion progress.
*Forming SWAT teams made up of Treasury and Fannie Mae staff to visit the seven largest servicers to work on conversion issues.
*New tools for borrowers. These are available on the Department's website and include an instructional video, links to required documents, and a conversion guide.
*Outreach to local organizations to enlist their assistance in helping borrowers through the process.
Apparently there has been progress made in ramping up the HAMP program with over 680,000 borrowers now in modifications. The Treasury Department hopes that the HAMP program will eventually help 3 to 4 million homeowners. Time will tell whether that ambitious goal can be reached.
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