In This Issue:
- Modifications to HAMP and FHA Programs Announced
- Updated HAMP FAQs Issued
Modifications to HAMP and FHA Programs Announced
The Obama administration announced changes to the Home
Affordable Modification Program and to FHA programs. Among other
things, servicers participating in the Home Affordable Modification
Program must (1) temporarily reduce payments to no more than 31% of
a borrower's income and offer a temporary assistance plan for
qualifying unemployed borrowers, (2) consider principal write-downs
and reductions in certain situations, and (3) increase borrower
outreach efforts. The FHA changes will allow underwater borrowers
to refinance into FHA loans. In connection with the FHA initiative,
lenders will be incentivized to ensure that qualifying loans,
including second lien mortgages, are within 115% of the home's
current value. The Home Affordable Modification Program changes are
expected to be in place in the next few months, while
