DSN NEWS .COM REPORT:
U.S. Secretary of the Treasury Jack Lew announced Thursday that Treasury is extending the Making Home Affordable Program for another two years. The new expiration date is now set for December 31, 2015. (EMPHASIS ADDED)
The program offers help to homeowners through solutions including the Home Affordable Modification Program (HAMP), Home Affordable Foreclosure Alternatives (HAFA), and the Second Lien Modification Program.
As of March, an estimated 1.1 million struggling homeowners have received a permanent modification through HAMP.
The move aligns with the Federal Housing Finance Agency’s (FHFA) extension for the Home Affordable Refinance Program (HARP), which was first announced in April.
The Treasury Department will pay mortgage servicers more for modifying loans in an earlier stage of delinquency and less the longer the process takes, according to guidelines released July 6, 2011.
The guidelines, effective October 1, will be adopted by Fannie Mae when the Federal Housing Finance Agency releases the new mortgage servicing fee structures.
Through HAMP, a servicer receives $1,000 when a homeowner is placed in a verified income trial modification for three months before becoming permanent. Effective October 1, mortgage servicers will receive $1,600 if the trial starts before a loan becomes more than 120 days delinquent, $1,200 for loans between 121 days and 210 days delinquent and $400.00 for loans placed in the trial stage after being 210 days delinquent.
Servicers are prohibited from requiring borrowers to make past due payments before entering a trial modification which would result in a higher fee for the servicer.