The U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development (HUD) have launched a ‘conversion drive’ campaign meant to help borrowers obtain permanent modifications under the Obama administration's Home Affordable Modification Program (HAMP).
Under the initiative, HAMP's largest servicers will be required to submit a schedule demonstrating their plans to reach a decision on each loan for which they have documentation and to communicate either a modification agreement or a denial letter to those borrowers.
‘Account liaisons’ assigned by the Treasury and/or Fannie Mae will follow up daily with these servicers to monitor progress against the servicer's plan. Daily progress will be aggregated by the end of each business day and reported to the administration. Servicers will also be required to report on the status of each modification to provide additional transparency about situations where borrowers face obstacles to moving to the permanent phase.
According to a HUD statement, servicers that fail to meet performance obligations under the servicer-participation agreement will be subject to consequences that could include monetary penalties and sanctions.
"We are encouraged by the pace at which trial modifications are now being made to provide immediate savings to struggling homeowners,’ says Phyllis Caldwell, the new chief of the Treasury's Homeownership Preservation Office. "We now must refocus our efforts on the conversion phase to ensure that borrowers and servicers know what their responsibilities are in converting trial modifications to permanent ones.’
Roughly 375,000 borrowers who have begun trial modifications since the start of the program are scheduled to convert to permanent modifications by the end of the year, the Treasury says. Beginning in December, the Treasury's servicer-performance report will include the data on permanent modifications as well as the number of active trial-period modifications that may convert by the end of the year if all borrower documents are successfully submitted, sorted by servicer and date.
Through the conversion drive, HUD will engage staff in its 81 field offices to distribute outreach tools. HUD will also encourage its 2,700 approved counseling organizations to distribute outreach information to participating borrowers. The administration will additionally engage the National Governors Association, National League of Cities and National Association of Counties to increase HAMP awareness, as well as coordinate with state regulators.
In partnering with the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, state regulators will have enhanced tools to assist borrowers who are facing challenges in converting to a permanent modification, the administration says. Regulators will be empowered to work directly with escalation and compliance teams to ensure that HAMP guidelines are consistently applied.
SOURCE: U.S. Treasury Department
Tag: serv
http://financialstability.gov/latest/tg_11302009b.html