MHA Program Supplemental Directive

On March 9, Supplemental Directive 12-02 was issued, extending the deadline for the MHA Program to the end of 2013 and expanding the population of homeowners that may be eligible for HAMP.  On March 12, a correction to the Supplemental Directive was issued to clarify that Home Affordable Unemployment Program forbearance plans are not eligible for servicer incentive compensation.  Supplemental Directive.  Supplemental Directive Correction. 

Obama Administration Housing Plan

On February 1, President Obama released a fact sheet outlining his plan to assist the recovery of the housing market. The key aspects of the President’s plan include: (i) broad based refinancing; (ii) a new homeowner bill of rights; (iii) a pilot sale by the FHFA to transition foreclosed property into rental housing; (iv) providing a full year of forbearance to unemployed borrowers; (v) a joint investigation into mortgage origination and servicing abuses; and (vi) expanding HAMP eligibility and increasing modification incentives.

HAMP Program Expansion

On January 27, Treasury and the Obama Administration announced updates to the HAMP program which will aim to extend the reach of HAMP to a broader pool of homeowners. The updates to the program include: (i) extending the program through December 31, 2013 (which conforms to the extended deadline for the HARP program); (ii) providing for more flexible eligibility criteria, including the DTI and occupancy standards; (iii) increasing incentives for principal reduction from between 6 and 21 cents on the dollar to between 18 and 63 cents on the dollar; and (iv) offering principal reduction incentives for loans owned or guaranteed by Fannie Mae or Freddie Mac. Treasury Release.

Joint Task Force on HAMP Mortgage Modification Scams

On December 1, SIGTARP, the Consumer Financial Protection Bureau, and Treasury created a joint task force to deal with scams targeted at homeowners seeking HAMP modifications. The joint task force issued a fraud alert which will be provided directly to homeowners eligible for HAMP. Treasury Release. Consumer Fraud Alert.

HAMP Update on New Dodd-Frank Certification Requirement

On September 21, Treasury and HUD issued a supplemental directive providing guidance on a new borrower certification for non-GSE loans included in the Making Home Affordable Program, as required under the Dodd-Frank Act. A servicer must now obtain a certification from a borrower that the borrower has not been convicted within the last ten years of: (i) felony larceny, theft, fraud or forgery, (ii) money laundering, or (iii) tax evasion in connection with a mortgage or real estate transaction.  HAMP Update.  Supplemental Directive.

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.

HAMP Performance Report

On May 17, Treasury and HUD released the April HAMP servicer performance report which shows a 13% increase in permanent modifications from the prior month and indicated that, by July, the reports will include more detailed performance measures, including a focus on the eight largest servicers, servicer compliance, program execution, and homeowner experience. Treasury Release. HAMP Report.

Geithner Testimony on Housing Finance System Reform

On March 23, Treasury Secretary Geithner testified before the House Financial Services Committee regarding the future of the housing finance system. Geithner set forth the Administration’s objectives for a reformed system, which include: (i) widely available mortgage credit, (ii) housing affordability, (iii) consumer protection, and (iv) financial stability. Treasury and HUD will submit a list of questions by April 15 for public comment to seek recommendations and comments on: (a) the priorities for government housing policy, (b) the role of government in the housing finance system, (c) characteristics of mortgage products available to consumers, (d) best practices to ensure consumer protection, and (e) the most effective design for the housing finance system. Testimony.

HAMP Supplemental Directive on Borrower Outreach

On March 24, Treasury issued a supplemental directive providing guidance to servicers of non-agency first lien mortgage loans for improving outreach to borrowers. The changes, effective June 1, include: (i) clarifying the requirement to proactively solicit borrowers with two or more due and unpaid payments for HAMP, (ii) prohibiting referral to foreclosure until a borrower is determined to be ineligible for HAMP or reasonable solicitation efforts have failed, (iii) requiring servicers to certify that borrowers are not HAMP-eligible and give borrowers 30 days to respond to a Non-Approval Notice before conducting a foreclosure sale, (iv) if requested, requiring servicers to consider borrowers in active bankruptcy for HAMP, and (v) clarifying the requirement that servicers use reasonable efforts to obtain approval from investors to participate in HAMP. Supplemental Directive.