Many homeowners under President Obama's foreclosure-prevention program may be at risk of foreclosure.
According to a Treasury Department guideline issued last month, mortgage companies have until January 31 to review all trial modifications that have been modified due to the Home Affordable Program. New guidelines will be issued next week.
Loan Services must review all trail modifications and must determine if borrowers have made all their payments and handed in necessary paperwork.
For the homeowners who have not, they will get letter giving 30 days to comply.
The goal of the new guideline is to try and clear up the backlog of borrowers stuck in trail periods.
Home owners have waited seven or eight months just to hear if they qualify for permanent mortgage adjustments.
"About 450,000 homeowners currently have HAMP trial modifications and have demonstrated a willingness and ability to make timely payments for at least three months," said Richard Neiman, superintendent of the New York State Banking Department.
"Now, unfortunately and very alarmingly, these same homeowners face the prospect of foreclosure strictly on account of documentation issues," he said.
Paperwork has caused an issue for the president's foreclosure-prevention program. Homeowners have been claiming, servicers are losing the documents sent in, but loan services have been claiming homeowners have not sent them in.
Next week new guidelines will be issued so the process can be expedited. The new guidelines might lighten the paperwork.
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