Passing with flying colors the new HAMP TEST

Passing with flying colors the new HAMP TEST

If you have applied for the government Home Affordable Modification Program HAMP, and you got rejected, but had no idea as to why and when you called no one could give you a straight answer, well now servicer's have to tell you like it is.

A new test called the HAMP test will help borrowers understand why they did not pass. Below are some highlights to this new test.

The HAMP test determines whether some borrowers receive loan modifications.

Servicers must reveal up to 33 test inputs on some mortgages.

Borrowers have 30 days to dispute the accuracy of the disclosed data.

With this new test and available data to home owners could be a blessing in disguise for some, but I can see how this will add a heavy load to servicers who are already under water with mounds of paperwork. As of Feb 1st, loan servicers are required to send letters disclosing up to 33 key data points as to why they were rejected for the HAMP program. Of course not all loans are required to disclose this information, so not every home owner will be getting this information. This new test falls under the Dodd Frank Wall Street Reform and Consumer Protection Act.

So what are some of the key data points that borrowers may be able to appeal if they feel the information is incorrect? The data will show information about the borrower's financial situation, home, existing loan and proposed modification. The final decision of course is still left up to the servicer; however it now gives an outlet for borrowers to voice their opinion.

Is there a time line as to when a homeowner needs to file this appeal? Yes, once the data point letter is received borrowers will have up to 30 days during which they can provide in writing what their evidence is to support what they believe is the correct information.

One key component that kicks homeowners out of a loan modification is the current value of the home. The HAMP program calls it the Net Present Value, if a borrower feels the value the lender is using is incorrect they now can appeal this decision, but most have evidence to support their cause.

So where can I test my data? Is there a website I can enter my information and see if I qualify?

Coming in late spring a website being developed by the US Treasury will offer borrowers who want to see the inputs in action will soon be able to run their own practice HAMP tests. This should give borrowers greater transparency and see how changes to the data could affect the results. There are many other factors that will also be considered that will be controlled by the servicer, such as the estimated cost of a modification and the perceived likelihood that the borrower will default on the loan and if foreclosure would be a better option. In the end it will give homeowners a better understanding as to what goes into the HAMP review process.

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