I am working on a foreclosure mediation in which the bank offered the borrower a permanent HAMP loan modification for a Freddie Mac loan. The borrower neither explicitly accepted nor declined it, but told the bank that several of its inputs (income, home value, etc.) were erroneous and supplied supporting information. After requiring the borrow to resubmit everything and scheduling a second mediation session, the bank now says the borrower declined the modification and the bank is not requried to consider another second modification. I spent a few hours reviewing the HAMP Handbook and the Freddie Mac Guide and find guidnace for the borrower disputing inputs when a mod is turned down, but nothing when it is approved with erroneous inputs which make the loan modification little better than the original loan. Any words of wisdom for me? Alison
It would seem to me that not correcting the erroneous information of at least verifying working to verify it, would be a lack of good faith.
I'd have them run the NPV with the corrections and see if it pencils out with the 31%
If with the corrections the mod at 31% of income still benefits the investor or beneficiary, I'd question good faith if they won't work on the corrections.
The lender is required to provide the borrower in writing the inputs used for the HAMP loan modification. They have up to 30 days to dispute any inputs that they feel were not accurate, but mostly this is done when the loan as failed the NPV calculation.
You may want to refer to the bulletins beyond the actual HAMP underwriting guidelines. They are frequently released and offer coding and new underwriting amendments that could be helpful to know.
Was the modification the lender offered close to the target reduction for HAMP?