Changes Coming to the Government’s HAMP Program

March 26, 2010 - Washington - In a Congressional hearing on Thursday, the Treasury Department testified that it will be making changes to its Home Affordable Mortgage Program (HAMP) due to complaints made by consumer watchdog groups. According to reports at TheAtlantic.com, there will be three main changes made to the HAMP program to help ensure that consumers are treated fairly by banking institutions.

The HAMP changes include:

·        The Banks must make the first move. Not all homeowners facing foreclosure even know about the HAMP program, so the Treasury Department has said that banks must determine if the affected homeowner is eligible before foreclosure proceedings are initiated. Once a homeowner misses two payments on their mortgage, the bank must approach them with details about loan modification through HAMP.

·        HAMP must be considered before foreclosure. Under these new guidelines, banks will not be able to foreclose on a property unless the homeowner has refused loan modification through HAMP or has failed to complete the three-month trial period.

·        Homeowners will receive more time if the trial period fails. Some banks initiate a foreclosure as soon as it's clear that the homeowner will not successfully finish the trial period. The Treasury Department has specified that the homeowner must be given at least 30 days once they have received notice that they were not approved for HAMP.

There's no word on when these changes will go into effect.