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New Obama Proposal Requires Lenders to Consider Borrowers for Modification Program

The Obama Administration has drafted a proposal that would require servicers to evaluate a delinquent borrower for the federal Home Affordable Modification Program (HAMP) before the foreclosure process could be initiated. If a borrower was not-approved for the HAMP program, they would be entitled to 30 more days before the foreclosure process can begin.

Servicers would not have to evaluate borrowers if they’ve already filed for Chapter 7 or Chapter 13 bankruptcy, but they would have to conduct an evaluation if the borrower asked for one.

Part of the proposal defines what is a considered a “reasonable effort” made by servicers in recruiting borrowers to the HAMP program. Under the terms of the proposal, servicers must make at least four phone calls over the course of more than 30 days. The servicer must also send two written notices, one of which must have a certified mail return receipt.

HAMP was created in 2009 to provide incentives to servicers who agree to modify a loan on the verge of foreclosure. To date, approximately 116,000 modifications have been approved through the HAMP program.

The proposal is still under consideration and has not yet been approved.

If you are having trouble keeping up with your mortgage loan, there are programs and services you can take advantage of to help save your home. An experienced Los Angeles foreclosure attorney at our office can provide you with information about these various programs, as well as provide you with information about loan modifications and other ways to fight your foreclosure.

Contact Pacific Attorney Group today to arrange a consultation to discuss your situation.