The US Treasury Department recently changed its policy for HAMP (Home Affordable Modification Program) with respect to borrowers in bankruptcy. Previously a borrower that was in an active bankruptcy case (Chapter 7 or Chapter 13) was eligible for HAMP “at the servicer’s discretion.” At the urging of the National Association of Consumer Bankruptcy Attorneys and others, this policy is changing. On June 1, 2010, mortgage servicers will be required to consider borrowers in active bankruptcy cases for loan modifications, if the borrowers’ attorney or their bankruptcy trustee appointed on their bankruptcy case submits a request for a loan modification to the mortgage servicer. If the borrowers are in a trial period plan before filing bankruptcy, the bankruptcy filing will not allow the mortgage company to deny a permanent HAMP modification just because the borrowers filed bankruptcy. Even though the changes take effect on June 1, 2010, if you are considering requesting a modification of your mortgage, you should not wait until June 1 to apply. It is suspected that many mortgage companies will implement the changes prior to June 1.
You can get detailed information on the government’s website [click here]. You can review the latest information from the government, perform a brief check to see if you qualify for one of the programs, and obtain the forms you may need to request a loan modification. The site is updated regularly, so check periodically to see the latest information.
Whether you qualify for a modification of your mortgage or not, you should sit down with a bankruptcy attorney to help you determine whether attempting to keep your home is your best option, and whether you should file bankruptcy. Call me today at 293-2392, to schedule an appointment, to review what your options are and to determine your best course of action.
(Many thanks to John Rao, attorney, who submitted the information regarding changes to the HAMP Program to the National Association of Consumer Bankruptcy Attorneys (NACBA) for members of NACBA. I am a member of NACBA.)
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