The U.S. Treasury announced some new measures aimed at increasing the number of trial home loan modifications becoming permanent.
Homeowners will now have to show documentation ahead of trial modifications. The Treasury said that trial modifications under the new plan would become permanent if three trial payments are made.
“The [American Securitization Forum (ASF) ] applauds Treasury's new HAMP guidance on documentation requirements as it will create more sustainable, permanent loan modifications that keeps more borrowers in their homes,” said the ASF's executive director Tom Deutsch. “Efficient and proper documentation requirements for loan modification eligibility is a critical component of any modification program. By requiring the initial package of documentation at the outset of the modification process, a servicer's conversion process to permanent modifications will be greatly enhanced.”