HAMP Supplemental Directive on Principal Forbearance

On June 4, Treasury released supplemental directive 10-05 under the HAMP program which sets forth (i) guidance on principal reduction and a principal reduction alternative, (ii) Treasury’s position regarding the applicability of the servicer safe harbor to residential loan modifications under HAMP, the Second Lien Modification Program and the Home Affordable Foreclosure Alternatives program, and (iii) Treasury’s position regarding the accounting treatment for HAMP modifications that include principal forbearance. Supplemental Directive. Principal Reduction Overview Alternative.