The home loan modification foreclosure prevention plan has helped homeowners find more for ability in their mortgage payment but there have also been issues surrounding homeowners who have been denied home loan assistance and a lower monthly mortgage payment. Obviously, numerous financial institutions that are participating in the federal modification program have had complaints by homeowners who feel they may have been unjustly denied a home loan modification plan or, in some cases, homeowners believe that servicers have not properly adhered to modification program guidelines and want information on why their particular application was denied for HAMP assistance.
Yet, according to reports, there are new requirements covered under the Dodd-Frank Wall Street Reform and Consumer Protection Act that may require servicers to send letters to certain homeowners that will outline why they may have been rejected for a home loan modification and, if homeowners feel there has been an error, this may offer them the chance to appeal the decision to their bank.
According to Bankrate.com, this requirement which is called a the “HAMP test” may give specific homeowners more information on why they are not receiving the assistance they need and this test essentially, “measures whether a loan modification makes financial sense for a lender,” and if this is the case, “the servicer must offer the borrower a trial modification.” While, again, this information may not be available to all homeowners who are denied a modification plan and, even if a homeowner appeals this decision, it will ultimately be up to the servicer as to whether they will offer a modification plan.
While there are reports that the Treasury Department will also give homeowners access to a HAMP test website, in the hopes of creating more transparency in the modification process and potentially clearing up any issues that homeowners may have, it needs to be understood that this access to information is not going to either guarantee a homeowner the modification assistance they seek or factor in all considerations that a particular servicer may apply to an individual homeowner’s case.
However, it’s hoped that if homeowners are able to look at more aspects of the modification program, are given more information on what goes into the consideration of a modification plan, and possibly provided reasons if they are denied a home loan modification trial plan, it could clear up misconceptions about modifications and possibly help future homeowners better wade through the modification process and potentially keep foreseeable and preventable foreclosures from occurring.