Have you applied for a loan modification and felt that your servicer did not properly review you for HAMP and other Making Home Affordable programs? Perhaps your servicer lost your documents or failed to provide you with the proper update on your file? Well, what are you waiting for? Escalate your case today and demand your servicer to be in accordance with the MHA guidelines!

Homeowners may contact the MHA Hotline at 888-995-HOPE to request assistance in the escalation of their cases. The MHA Support Center, acting as an intermediary between the homeowner and servicer, ensures that the servicer is complying with the MHA guidelines and is reviewing homeowners’ case escalations in a timely fashion. However, homeowners may also contact their servicers directly or authorize their attorneys to go through the HAMP Solution Center (HSC) to seek resolution. No matter what route is taken, it may take up to 30 or more days for an escalated case to be reviewed and resolved, so homeowners should act immediately if they believe to have been wrongly denied a MHA Program.

Case escalations give power to the homeowner and keep disorganized servicers in check. Please go here if you would like to know how to escalate your case today!

The time has come! Supplemental Directive 13-09 to the Making Homes Affordable handbook will take effect in two days on January 10, 2014.

As discussed in a previous entry, this Supplemental Directive makes the loss mitigation process easier, clearer, and more efficient. It is an alignment with the final Consumer Finance Protection Bureau (CNPB) Mortgage Servicing Regulations, which prohibit high risk lending and will also take effect on January 10, 2014. 

Servicers must review documents and submit Incomplete Information Notices in tighter timeframes than ever before. This makes sense because most borrowers submit incomplete initial packets anyway and should be advised of missing documents immediately to move forward from the initial stage. By contacting the borrowers earlier and responding to them quicker, servicers are now able to maximize borrower protection in their review of loan modification applications.

The Department of the Treasury and the Department of Housing and Urban Development did not want to completely overhaul the Making Homes Affordable guidebook because they did not want to alter or destroy the integrity of the programs. All changes to the Making Homes Affordable handbook were kept to a minimum and in accordance with the final CFPB Mortgage Servicing Regulations. Remember, the CFPB regulations are the bare bones of requirements for servicers, so when servicers review borrowers for HAMP, they still must consider the Making Homes Affordable handbook and state laws as well.  

Also, HAMP still remains top priority even though CFPB regulations require borrowers to be considered for all loss mitigation options at the same time. If the servicer participates in the HAMP program and the borrower is eligible for HAMP, the borrower must be given HAMP over other in-house loan modifications. 

The Consumer Financial Protection Bureau (CFPB) and 49 states have signed a proposed court order requiring Ocwen to spend $2.1 billion on loan modification programs and relief to victims of foreclosure. 

Ocwen is the largest non-bank mortgage servicer in the United States. It was alleged by CFPB that for years, Ocwen has illegally delayed loan modifications, charged improper fees, provided incorrect updates to consumers who were applying for loan modifications, erroneously reviewed foreclosure documents, and inaccurately applied and tracked monthly mortgage payments. 

Like GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo, Ocwen is alleged to have deceived and abused the system for too long and must be punished for its illegal practices.

Under the Order, Ocwen is required to comply with the provisions of the 2012 National Mortgage Settlement and must comply with the new mortgage servicing rules that are taking effect January 2014. A knowledgeable, responsive single point of contact must be established for borrowers applying for relief, so that the loan modification process will be clearer and quicker than ever before. Instead of being sacrificed, borrowers will now be protected and given a fair shot at saving their homes.

Borrowers should be overjoyed that there will be more communication between servicer and borrower, and that borrowers who were improperly foreclosed on between 2009 and 2012 may receive compensation. It is a great step forward in the mortgage servicing world. 

Thank you to Lieb at Law's Assistant Case Manager, Jessica Vogele, for sharing this valuable information. 

A whole new world of getting a mortgage is coming in the beginning of 2014. You should get familiar now!!!

To remind you, in the years before 2008, financial institutions were subject to little regulation in the United States. Many lenders did not even bother to verify income or debt before handing over adjustable-rate mortgages (ARMs) to consumers who could not afford them. High risk lending was the norm and mortgage fraud was rampant. These practices caused the subprime mortgage crisis and the worst recession that the country has experienced since the 1930s. Thousands of homes were foreclosed on and over one hundred mortgage lenders went bankrupt as more and more people could no longer afford their monthly mortgage payments.

As a result, The Consumer Financial Protection Bureau is issuing a final rule that prohibits high risk lending and implements the Truth in Lending Act and sections 1411, 1412, and 1414 of the Dodd-Frank Act. This rule will take effect on January 10, 2014, and will require mortgage lenders to verify consumers’ income and debt. Prepayment penalties that punish borrowers if they sell or refinance their home within a certain time frame are now generally prohibited. Qualified mortgages, which are less likely to end up in default, are defined in great detail and cannot have terms longer than 30 years or fees exceeding 3% of the total loan amount.  Lender are also encouraged to refinance adjustable-rate mortgages (ARMs) and must maintain documentation of compliance for three years after the loan is given to the consumer.

To remain in the real estate game, you must understand these rules and what a qualified mortgage is as that will drive the industry. Please read the rule for yourself!