Via
Nancy Moeller (Seven Gables Real Estate):
The Department of Housing and Urban Development (HUD) recently announced changes to help improve the ratio of trail loan modifications to successful permanent modifications. These changes are supposed to take effect June 1.
-
Here's why the current process makes no sense: Under previous guidelines, homeowners were not required to document their incomes prior to receiving a trial mortgage modification. When it came time to verify the paperwork and wade through inefficient processees, under 6% of trail modifications became permanant.
-
Skip to the chase: The new process requires that servicers collect a formal application, a hardship letter, proof of income and a form authorizing the Internal Revenue Service to release tax data to the servicer BEFORE a trail modification is approved.
-
Ah, less red tape: Then, if the borrower meets the modified payment requirements for three months, the modification automatically will be made permanent.
-
Here's the part that seems to good to be true: Under the plan, servicers also will be required to respond within 10 days to an initial request for a modification. Once documents are provided, the servicer will have one month to let borrowers know whether they qualify for a trial modifications.
-
How are they going to do this? What's the formula? How will they anticipate failure ratios? Servicers also must calculate whether the lender or current owner of the loan will benefit from a mortgage modification, or if foreclosing on the property is in the loan owner's best interest. If the loan owner will benefit from a modification, the servicer is required to grant the modification.
We'll see if how this change works out. I'm still waiting for banks to provide us pre-approved short sales.
Seven Gables Real Estate
License #01727426
www.TheOCExperts.com
www.ZeroShort.com
Direct: 714 276-7006
Fax: 714 917-2293
;)
;)
;)
Mirela,
I am with you on the to good to be true. Unless they somehow magically hired an army of qualified, trained employees there is no way they can stay to that timeline when the apps start flooding in.