New Hamp Guidelines - Help Homeowners in Bankruptcy

In an effort to curtail the foreclosure crisis the federal government provided new Home Affordable Modification Program (HAMP) outreach and communication guidelines for foreclosure actions while considering borrowers eligibility. The new guidelines provide additional protection for borrowers who are delinquent and have filed bankruptcy Chapter 7 or Chapter 13 but would otherwise be eligible for HAMP benefits. Some key components of the new guidelines are noted below:

Foreclosure

1. The mortgage servicer must evaluate the borrower’s eligibility under "HAMP", determining ineligibility before placing the borrower in foreclosure status.
2. If foreclosure proceedings have been initiated, the Trustee Sale cannot occur until after the servicer determines if the borrower is ineligible under HAMP.
3. The mortgage servicer must give the borrower 30 days to respond to “Non-Approval Notices” in certain circumstances before moving forward with the foreclosure sale.
4. The mortgage servicer must provide, written notice, to the foreclosure lawyer certification the borrower's ineligibility for HAMP before proceeding with a foreclosure sale.

Bankruptcy

1.  A homeowner in active bankruptcy or the borrower’s bankruptcy attorney or trustee can request the mortgage servicer to consider the borrower under HAMP. New guidelines mean the mortgage servicer can no longer decline borrower's as a “proper exercise of discretion.”
2. If a homeowner has been approved for a HAMP trial mod and files a Chapter 7 or Chapter 13, the mortgage servicer may no longer deny homeowners permanent modifications just for filing bankruptcy.  
3. Delinquent borrower's having discharged Chapter 7 bankruptcies choosing not to reaffirm, the first lien mortgage debt is still eligible under HAMP with the following provision added to the permanent modification agreement: “I was discharged in a bankruptcy Chapter 7 proceeding subsequent to the execution of the loan documents. Based on this representation, the borrower's lender agrees that I will not have personal liability on the debt pursuant to this Agreement.”

Unfair Lending Practices

With these new guidelines borrower's who are struggling with their mortgage payments or feeling their lender/mortgage servicer has not worked with them on a loan modification should definitely call a bankruptcy attorney. In some cases we have found violations of "Fair Lending Practices" and "Unfair Business Practices" from these mortgage servicers and lenders. For instance: Bank of America took over Countrywide Home Loans only to uncover rampid mortgage fraud as well as Wells Fargo has with Wachovia/World Savings with their "Option ARM's". 

As California bankruptcy attorneys we are tired of seeing people loose their homes to foreclosure after being coaxed into a "toxic mortgage", people who have owned their homes for over 10 years! The Banks and Wall Street created these mortgage backed securities for these toxic stated income loans and raked in big time. For a copy of the full disclosure, see Supplemental Directive 10-02. If you are trying to avoid foreclosure and have been denied a loan modification or just don't know where to turn, call the Law Offices of Zhou & Chini at (800) 972-9600 for a FREE confidential consultation with a California bankruptcy attorney.