The U.S. Treasury wants to make it tougher for lenders to foreclose on underwater borrowers. Under the proposal lenders would be required to contact borrowers who are 60-days behind in their mortgage payments and then assess whether the borrower is eligible for HAMP (Home Affordabie Modification Program). Lenders would be forced to account for their activities and to state in writing why a borrower is not eligible for a loan modification under HAMP.
Also, borrowers would be given 30-days to respond upon denial of a loan modification and lenders would be prohibited from auctioning the property or from putting it up for sale. At the very least, these proposed changes would slow down the foreclosure process and would put some much needed teeth in HAMP.
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