- Requirement of a reasonable effort to solicit borrower for HAMP (already implicit under present policy)
- Prohibition of referral to foreclosure until the borrower is evaluated for HAMP or reasonable contact efforts have failed
- Cessation of foreclosure action once borrower in trial period plan
- Written certification that a borrower is not eligible for HAMP before an a foreclosure sale may proceed
- Servicers must consider borrowers in bankruptcy upon request
- Servicers may use bankruptcy schedules instead of "request for modification" form
- Trial period waived for borrowers that have completed three or more months on bankruptcy plan where payment is greater than HAMP payment
Trial period may be extended up to 5 months in order to obtain delay in obtaining needed court approvals.
HAMP presently sets a standard for affordablity and sustainable modification at 31% of gross monthly income. HAMP matches the reductions in monthly payments dollar-for-dollar with the investor in reducing the payments from 38% to 31% of gross monthly income. HAMP requires participatingn servicers to evaluate every eligible mortgage using a Net Present Value test. If the test is positive, "the servicer must modify the loan."
HAMP offers services a "pay for success" incentives with an up-front payment of $1,000.00 for each modification after completion of the trial modification period, and up to $1,000.00 a year for three years. Homeowners may also earn up to $1,000.00 toward principal reduction for each year, up to five years, that they remain current on the mortgage payments.
Over a hundred servicers together with thousands of Fannie Mae and Freddie Mac servicers are participating in HAMP and about 89% of all outstanding residential mortgage are covered by the HAMP program. The U.S. Treasury Dept. reports though that only about 116,000 homeowners have received permanent modifications.