HPDP To Be Implemented By September; New Servicers To HAMP

easury has [link=http://www.financialstability.gov/docs/press/SupplementalDirective7-31-09.pdf][u]released[/u][/link] its Supplemental Directive for the Home Price Decline Protection (HPDP) component of the Home Affordable Modification Program (HAMP). The HAMP subprogram provides additional incentive payments for modifications on properties located in areas where home prices have recently declined. The purpose of the HPDP is to encourage additional lender participation and HAMP modifications in areas with recent price declines by helping to offset any incremental collateral loss on modifications that do not succeed. "This is an important next step in our multifaceted efforts to bring relief to struggling homeowners and stabilize the housing market," says Assistant Secretary for Financial Institutions Michael Barr. "Home-price decline protection can help homeowners who may not have been reached otherwise." All HAMP loan modifications begun after Sept. 1 are eligible for HPDP payments. The Treasury has allocated a total of up to $10 billion for the HPDP program, but the actual amount spent will depend on the home-price trends. The funds available to individual servicers to pay HPDP and all other incentives on HAMP modifications will be capped according to the Program Participation Cap included in their Servicer Participation Agreement. Servicers' initial caps are based on the Treasury's estimation of the number of modifications expected to be performed by each servicer during the term of HAMP. According to the Treasury's most recent transaction report, three new servicers have been added to HAMP: St. Louis-based First Bank, Charlotte, N.C.-based Wachovia Bank NA and West Lafayette, Ind.-based Purdue Employees Federal Credit Union. First Bank's incentive cap is $6.46 million, Wachovia's is $85.02 million, and Purdue's is $1.09 million. SOURCE: [link=http://www.financialstability.gov]FinancialStability.gov


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