NEW COMPLAINT CHANNELS FOR HOMEOWNERS WHO HAVE BEEN DECLINED FOR HAMPS (TREASURY DEPARTMENT’S “HOME AFFORDABLE MODIFICATION PROGRAM”)

In November of 2010, the U.S. Department of Treasury issued an update to HAMP underwriting and borrower assistance requirements for lenders and servicers in response to mandates of the Dodd-Frank Wall Street Reform and Consumer Protection Act. These requirements include more stringent notification and processing requirements for servicers in the way they manage homeowners’ cases and try to create a less horrific gauntlet for homeowners to navigate.

When a homeowner / borrower believes their HAMP application has been wrongly denied they are supposed to be able to escalate a dispute with their own servicer, who must establish an “escalation department”, as well as with the Department of Treasury, Fannie Mae or Freddie Mac. Servicers are also required, when asked, to provide the homeowner every data item that was used in their calculations for HAMP eligibility (e.g., the Net Present Value calculation). These escalation channels were supposed to be available by February 1, 2011. To determine the actual NPV which the Lender or Servicer will not disclose, you can run a REST Report (www.hampreport.com)

What does this mean for you, the homeowner who is delinquent on your mortgage? Below follows guidance for Housing Counselors from the Treasury website (although it applies to individual homeowners too):

First, work through your normal contacts and channels with the servicer. If that does not resolve the issue, elevate your concern to a senior manager within the servicer’s organization. Here are examples of cases that represent valid reasons for escalation:

• Servicer refuses to stop a scheduled foreclosure sale on a borrower’s house while the borrower is being evaluated for HAMP.
• Servicer charges up-front fees for the modification.
• Servicer instructs the borrower to miss a payment.
• Servicer claims that they are waiting for information or guidance from Treasury (i.e. Treasury is causing the delay).
• Servicer advises the borrower to intentionally misrepresent their personal or financial information.
• Servicer says they are not participating in HAMP, but the loan’s investor is a GSE (Fannie and Freddie owned loans are required to participate).
• Servicer says borrower doesn’t qualify, but counselor has reason to believe that the borrower is eligible.

Contact the Appropriate Escalation Team: If escalating to your Servicer’s senior management does not resolve the issue, escalate the issue using the following contacts: 

Fannie Mae Loans: 1-800-7FANNIE, resource_center@fanniemae.com

Freddie Mac Loans: 1-800-freddie, borrower_outreach@freddiemac.com

Non-GSE Loans: (HAMP SOLUTIONS CENTER) 1-866-939-4469, escalations@hmpadmin.com