What can you do to complain about a servicer or lender not following the federal Home Affordable Modification Program (HAMP) guidelines? Here are the necessary steps and procedures, according to the CAR. You should note the HAMP-complaint process includes GSE (Fannie and Freddie) and non-GSE loan modifications and the more recently released guidelines for Home Affordable Foreclosure Alternatives Program (HAFA) (short sales and deeds-in-lieu). Note that the HAFA guidelines go into effect April 5, 2010, although servicers/lenders may implement them sooner.
Counselor Escalation Process
If you believe a servicer is incorrectly interpreting HAMP guidelines, take the following steps:
Step 1: Escalate the Case to Senior Management at the Servicer Shop
First, work through your normal contacts and channels with the servicer. If that does not resolve the issue, elevate your concern to a senior manager within the servicer's organization.
Here are examples of cases that represent valid reasons for escalation:
. Servicer refuses to stop a scheduled foreclosure sale on a borrower's house while the borrower is being evaluated for HAMP.
. Servicer charges up-front fees for the modification.
. Servicer instructs the borrower to miss a payment.
. Servicer claims that they are waiting for information or guidance from Treasury (i.e. Treasury is causing the delay).
. Servicer advises the borrower to intentionally misrepresent their personal or financial information.
. Servicer says they are not participating in HAMP, but the loan's investor is a GSE.
. Servicer says borrower doesn't qualify, but counselor has reason to believe that the borrower is eligible.
Step 2: Contact the Appropriate Escalation Team
If escalating to senior management does not resolve the issue, escalate the issue using the following contact table:
INVESTORS DETERMINE IF LOAN IS GSE-OWNED CONTACT INFORMATION
Fannie Mae Loans www.FannieMae.com/
LoanLookup Phone: 1-800-7FANNIE
Freddie Mac Loans www.FreddieMac.com/
MyMortgage Phone: 1-800-FREDDIE
Non-GSE Loans - HAMP Solution Center
Gather the necessary case information and borrower consent.
If your Realtor or Broker is assisting with your file, you will be required to provide the escalation team with a written authorization authorizing the escalation team and the servicer to share the your personal financial information with your representative. The written borrower authorization must be received by the escalation team before status information can be shared with your Realtor. Additional instructions are available as needed from the escalation team.
The inquiry information that a counselor will need to supply for a status includes the following:
. Homeowner's Name
. Property Address
. Servicer Name
. Servicer Loan Number
. Foreclosure Date (if applicable)
. Counselor Name & Organization
. Counselor Email
. Counselor Phone
. Counselor Relationship to Homeowner
An escalation specialist will work with the servicer regarding the case and seek to provide you with an initial status within four business days of receipt of the requested inquiry information and borrower authorization. If the servicer is unwilling to comply with program guidance or the escalation team identifies systemic non-compliance, the escalation team may report the servicer to the Making Home Affordable Compliance team.
------------------------------------------------------------------------------------------------------------------------BROKER LIABLE FOR CHARGING UNEARNED FEE
A broker must perform a specific settlement service to charge a $149 "administrative brokerage commission" fee under the Real Estate Settlement Procedures Act (RESPA). That was the recent decision of a federal district court in Alabama in the case of Busby v. JRHBW Realty, Inc. (Case No. 2:04-CV-2799-VEH). This decision serves as a good reminder for REALTORS® to refrain from charging unearned fees under RESPA.
In this case, a seller in Jefferson, Alabama agreed to pay the real estate broker a five percent commission. However, during the closing and settlement, the broker also charged the buyer a $149 "administrative brokerage commission" (ABC) fee in connection with a federally-related mortgage loan.
The buyer paid the $149 ABC fee, but then sued the broker and succeeded in obtaining class action status for over 30,000 consumers. The buyer claimed that the broker performed no services for the $149 ABC fee. According to HUD, RESPA prohibits an unearned fee, such as when a "service provider charges the consumer a fee where no, nominal, or duplicative work is done."
In response to the buyer's claim, the broker argued that the ABC fee was for an array of services, including overhead expenses, regulatory compliance, technological enhancements, and additional commission. The court, however, agreed with the buyer. The court observed that the array of services listed by the broker were not settlement services because they did not occur at or before the closing, and any direct benefit to the buyer was negligible. The court also pointed out that, as additional commission, the $149 ABC fee would be a duplication of the percentage commission already charged.