California Foreclosure Help? U.S. Treasury Seeking New Guidelines for Loan Modifcations
By: Kathryn Davis
RIVERSIDE CA, February 24 (FreeRateUpdate.com) – According to latest information provided by the WallStreet Journal the U.S. Treasury is considering new guidelines for mortgage lenders that would be working directly with the HAMP loan modification program that would give distressed borrowers more time to try to qualify for a federal program aimed at averting foreclosures. If these new guidelines get implemented then the number of foreclosures should decline in areas like Riverside, San Bernardino, 
Corona, Perris, Lake Elsinore.
In this new proposal, loan-servicing companies, which collect payments and handle foreclosures for the mortgage lenders (i.e. Aurora Loan Servicing), would have to give borrowers 30 days to respond after being denied a modification of their loan terms under the Home Affordable Modification Program, known as HAMP. During that period, it would allow borrowers to appeal against the decision, and the servicer couldn’t put the home up for sale and continue with a foreclosure auction.
Servicers also would be required to provide a “written certification” that a borrower isn’t eligible for a HAMP loan modification before a foreclosure sale could be scheduled again.
The proposal calls for servicers to seek contact with all borrowers who are 60 days or more delinquent on their loans and meet the “eligibility profile” for HAMP in an effort to determine whether they qualify. The effort to reach borrowers would have to include at least four telephone calls and two written notices, including at least one by certified mail. To meet this new demand of contact with all delinquent borrowers the servicing companies would need to hire more employees in order to meet this demand.
Servicers could deny a new application for a HAMP loan modification received within six days of a scheduled foreclosure sale. But borrowers would have to be notified of the deadline for seeking a HAMP loan modification. This is to deter last minute loan modification applications, the loan modification process can be a lengthy one expecially during the review process and a foreclosure sale date can’t be stopped last minute with a loan modification request. If you are seeking a loan modification it is best to apply at least 30 days before your foreclosure sale date.
It is important to note that these new guidelines are NOT in effect yet, they have not bee approved by the servicers and implemented yet. This is something that the U.S. Treasury is suggesting to them. As soon as these new guidelines are in place we will post the information here.