By Alan C. Hochheiser, Esq.
On May 18, 2011, The Treasury Department issued Supplemental Directive 11-04 under the Home Affordable Modification Program (HAMP). The purpose of this Directive is to require servicers of non-GSE mortgages to have a single point of contact for dealing with customers who are currently in or may be eligible for HAMP programs on first mortgages. Second Mortgages are not covered under this Directive.
The single point of contact (SPC) must be in a position to communicate with the borrower about a resolution for their delinquency. The SPC must be in place for the entire delinquency or the imminent default resolution process including any home retention or non-foreclosure liquidation options, and if the loan is subsequently referred to foreclosure, the relationship manager must be available to respond to the borrower’s inquiries regarding the status of the foreclosure. In addition to HAMP, this will be required with the Home Affordable Unemployment Program (UP) and the Home Affordable Foreclosure Alternatives (HAFA) program. The effective date of this Supplemental Directive is September 1, 2011.
Please be advised that for those borrowers who are in the process of being evaluated for HAMP, UP or HAFA, who are in a trial period plan or a UP forbearance plan, or who have executed a short sale or deed in lieu agreement by the effective date, the Supplemental Directive must be signed by the relationship manager by no later than November 1, 2011. In addition, borrowers who were originally ineligible for any of the aforementioned programs prior to September 1, 2011 and re-request an evaluation after that time, must be assigned a relationship manager if the servicer determines there has been a significant change in the borrower’s circumstances that merits the re-evaluation.
Under this Supplemental Directive, the relationship manager must provide the borrower, in writing within five (5) business days of being assigned to the borrower, a notice which includes a toll free number and at lease one other means of contact for the relationship manager. The notice must also provide the preferred means for the transmission of any required documentation from the borrower to the servicer. Please note, that if circumstances arise where the relationship manager should change, written notice of said change and contact information must be communicated to the borrowers.
Additional information in regard to Supplemental Directive 11-04 may be obtained through the US Treasury’s website at treasury.gov.
Weltman, Weinberg & Reis Co., LPA will keep you advised on issues pertaining to HAMP and other bankruptcy matters.
If you have any questions, please contact Alan C. Hochheiser, Esq. Alan is the Managing Partner of the Bankruptcy Practice Group of Weltman, Weinberg & Reis Co., LPA located in the Brooklyn Heights, Ohio office. He can be reached at 216.739.5649 or email@example.com.