Loan modification in the United States

525:) bankruptcy and ensuing scandal are important to understand. A dynamic interplay between social good, capital ownership and the rule of law is ongoing in the U.S. experiment with the democratic process. Much of the business models of IndyMac and also the government backed FrannieMae and FreddieMac quasi-banks were based on concentrated debt. This model became very high risk as it was based on the faulty assumption that housing values would increase. In fact, the prevalence of their mortgages greatly fed the housing bubble with significant crossfunding and possible corruption to the government regulatory function through dramatic campaign funding contributions from these organizations. In the less regulated business climate of the late 1800s, speculative bubbles were corrected by painful financial panics. True understanding is yet to be documented for the speculative housing bubble of 2008, but federal government management has seemingly replaced the severity of a financial panic with a persistent yet less severe correction. This correction is becoming known at the 976:

homeownership'. Many euphemisms are used to implicitly stress the concept that homeownership is not the result of a lifetime of effort but a government-given right. These euphemisms like "HOPE, relief and Save-the-Dream" as used above in naming or implementing the loan modification programs. The origins of the word 'mortgage' is a death pledge—a concept that perhaps even exceeds the common view of personal integrity. At the foundation of homeownership should be a personal long-term commitment to pay the terms of the mortgage. On the bankers side of the contract, their business model is regulated by the 'social good' which are implemented by government by chartering banks. If the banks implement policies that lead to financial bubbles and panics, a democratic government is equipped with the tools to uncharter and redistribute a banks assets.

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created by the Financial Stability Act of 2009. The program was built as collaboration with banks, services, credit unions, the FHA, the VA, the USDA and the Federal Housing Finance Agency, to create standard loan modification guidelines for lenders to take into consideration when evaluating a borrower for a potential loan modification. Over 110 major lenders have already signed onto the program. The Program is now looked upon as the industry standard practice for lenders to analyze potential modification applicants.

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explain why. Often, a rejection is based upon a miscalculation, a misinterpretation, or an oversight. In this program, the debtor's attorney can demand that the servicer's representative explain his calculations. Often, the mistakes are found and corrected, resulting in the modification being accepted.

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Early 2012 the Treasury redesigned the HAMP as Tier 1 for the original first-lien modification process and on June 1, 2012 Tier 2 became available. Tier 2 is for either owner-occupied properties or rental properties. For mortgages secured by rental properties, only those that are two or more payments

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In a press conference Tuesday, Federal Housing Finance Agency director James Lockhart said the program would target high-risk borrowers — those 90 or more days delinquent on their mortgages — and employ various modification strategies to get borrowers down to an “affordable” mortgage payment, defined

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The RMFM Program was cancelled in 2011 following widespread criticism of the program. The RMFM failed because it had no teeth, because judges were reluctant to punish the mortgage companies for failing to mediate in good faith, and because borrowers were not receiving the cooperation they needed from

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The modification sequence requires first reducing the interest rate for trial period of 3–9 months(subject to a rate floor of 2%), then if necessary extending the term or amortization of the loan up to a maximum of 40 years, and then if necessary forbearing principal. Principal forgiveness or a Hope

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framework is an additional tool that servicers will now have to help avoid preventable foreclosures. This framework will not only help homeowners who receive a streamlined modification, but will also further address servicer capacity concerns by freeing up resources, helping ensure that borrowers do

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The loan is at least 60 days delinquent where the loan is considered one day delinquent on the day following the next payment due date. Many servicing contracts often contain a standard clause allowing the servicer to modify seriously delinquent or defaulted mortgages, or mortgages where default is

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may not be the solution to all distressed mortgage problems, it will certainly provide an additional venue for homeowners in need. Applying for a modification through bankruptcy may provide relief from the dischargeable debts that are keeping the debtor from being able to make the mortgage payments

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streamlined approach and have greatly benefited from the FDIC's input and example. To accommodate the need for more flexibility among a larger number of servicers, the Streamlined Modification Program does differ from the IndyMac model in a few areas. However, it uses the same fundamental tools to

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household income. Once the affordable payment is determined, there are several steps the servicer can take to create that payment – extending the term, reducing the interest rate, and forbearing interest. In the event that the affordable payment is still beyond the borrower's means, the borrower's

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While the bankruptcy mediation program does not guarantee a residential loan modification, it does make it much harder for a mortgage servicer to reject a modification because of the stringent requirement to act in good faith. For instance, if a servicer rejects a HAMP application, it will have to

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In 2012, the Bankruptcy Court in the Middle District of Florida implemented its own version of the failed RMFM, but unlike the state court version, it has seen a much higher success rate. One Orlando bankruptcy attorney reported a 90% success rate, with 18% of his modifications involving principal

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It is noteworthy that this interest rate is not fixed, and will generally increase 1%/year until it reaches what ever the current rate is 5 years after the modification. Often it includes a balloon payment at the end of the first 5 years. This practice has been found controversial by many in the

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will suspend any pending motions for relief from stay (“MFR”). However, while an LMM is pending, debtors will be required to pay 31% of their gross monthly income through the Chapter 13 plan as an “adequate protection” payment. The fees a debtor will have to pay to participate in the program will

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In 2009, the Florida Supreme Court forced every Florida Circuit Court (the courts in which Foreclosure Lawsuits are heard), to implement a mediation program for homeowners facing Foreclosure. This program was called the “Residential Mortgage Foreclosure Mediation” (RMFM) Program. The idea was for

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in the United States a number of mortgage modification programs were enacted by the states to limit foreclosure sales and subsequent homelessness and its economic impact. Because of the shrinkage of the economy, many borrowers lost their jobs and income and were unable to maintain their mortgage

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Affordability versus value: lenders will take a loss on the difference between the existing obligations and the new loan, which is set at 96.5 percent of current appraised value. The lender may choose to provide homeowners with an affordable monthly mortgage payment through a loan modification

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interest rate in increments of 0.125 percent to an interest rate that is not less than 3 percent. If the new rate is set below the market interest rate, after five years it will step up in annual increments to either the original loan interest rate or the market interest rate at the time of the

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On December 6, 2007, an industry-led plan was announced to help avert foreclosure for certain sub-prime homeowners who face unaffordable payments when their interest rates reset. This plan provides for a streamlined process to extend the starter rates on sub-prime ARMs for at least five years in

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are a growing problem. Homeowners must protect themselves so they do not lose money or their home. Scammers make promises that they cannot keep, such as guarantees to “save” your home or lower your mortgage, often for a fee. Scammers may pretend that they have direct contact with your mortgage

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Participating loan servicers will be required to use a net present value (NPV) test on each loan that is at risk of imminent default or at least 60 days delinquent. The NPV test will compare the net present value of cash flows with modification and without modification. If the test is positive:

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The Southern District's program also includes the utilization of a document processing program called the DMM Portal. Participants in the LMM program will use this secure online portal for the exchange of documents and communication. This program will help ensure that documents sent between the

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U.S. House of Representatives, 111th Congress, 1st Session, H.R. 384 (A Bill to Reform the Troubled Assets Relief Program (TARP) of the Secretary Of the Treasury and ensure accountability under such program) (January 9, 2009), Section 201, Page 21, Line 19 (a); Section 204, Page 24, Line 4 (b)

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The Home Affordable Modification Program (HAMP) was established on February 18, 2009 to help up from 7 to 8 million struggling homeowners at risk of foreclosure by working with their lenders to lower monthly mortgage payments. The Program is part of the Making Home Affordable Program which was

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Mediation is usually a great way for a plaintiff and defendant to sit down with a neutral arbiter to hash out their differences and come to a resolution that is usually better than continued litigation. Mediation is successful in all types of disputes including personal injury cases, contract

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The U.S. housing boom of the first few years of the 21st century ended abruptly in 2006. Housing starts, which peaked at more than 2 million units in 2005, plummeted to just over half that level. Home prices, which were increasing at double-digit rates nationally in 2004 and 2005, have fallen

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that help those having problems making the payments by reducing interest rates, monthly payments or principal balances. Lending institutions could make one or more of these changes to relieve financial pressure on borrowers to prevent the condition of foreclosure. Loan modifications have been

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Through the SMP, servicers may change the terms of a loan to reduce a borrower's first lien monthly mortgage payment, including taxes, insurance and homeowners association payments, to an amount equal to 38 percent of gross monthly income. The changes in terms may include one or more of the

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Even amongst reputable refinance organizations, the fundamental education of the house owner is not stressed. Some may even request struggling homeowners to pledge their time to become politically active. The controversy exists between personal integrity and the concept of a 'right to

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when a borrower demonstrates the need. As noted above, these guidelines apply to borrowers who are still current in their payments, but whose default is reasonably foreseeable. This new guideline is effective immediately, and borrowers may obtain information on eligibility at

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Borrowers meeting the SMP eligibility requirements enter into a trial period in which they must make monthly loan payments equal to the proposed modified payment. Timely payments must be made for three consecutive months before a borrower's loan can be modified under the SMP.

99:, looking back as far as the 1980s, "the FDIC applied workout procedures for troubled loans out of bank failures, modifying loans to make them affordable and to turn nonperforming into performing loans by offering refinances, loan assumptions, and family loan transfers." 264:

debtors may use LMM to request a surrender of the property (a real surrender that provides for a transfer of title). LMM may be used by Chapter 13 debtors to request and apply for modification through mediation or surrender of any property they no longer want to own.

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lenders to provide an in-person or telephonic meeting with the Homeowner/Defendant in the presence of an impartial mediator to discuss the Foreclosure Lawsuit and possible alternatives (including Loan Modification, Deed in Lieu of Foreclosure, and Short Sale).

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Homeowners can call the Homeowner's HOPE Hotline at 1-888-995-HOPE (4673) for information about the Making Home Affordable Program and to speak with a HUD approved housing counselor. Assistance is available in English and Spanish, and other languages by

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study published in July estimated that if U.S. home prices fell only 5 percent, subprime credit losses to investors would total just under $ 150 billion, and Alt-A credit losses would total $ 25 billion. On the heels of this report came news that the

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The monthly payment includes principal, interest, taxes, insurance, flood insurance, homeowner's association and/or condominium fees. Monthly income includes wages, salary, overtime, fees, commissions, tips, social security, pensions, and all other

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Parameters of the NPV test are spelled out in the guidelines, including acceptable discount rates, property valuation methodologies, home price appreciation assumptions, foreclosure costs and timelines, and borrower cure and redefault rate

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cases where borrowers remain current on their loans but cannot refinance or afford the higher payments after reset. An important component of the industry-led plan is detailed reporting of loan modification activity. Working with the

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Though lenders are boosting their attempts to curb record-high home foreclosures, fewer than half of loan modifications made at the end of last year actually reduced borrowers' payments by more than 10 percent, data released Friday

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Fannie Mae's foreclosure prevention efforts have generally been made available to a borrower only after a delinquency occurs. Under Fannie Mae's new guidance, loan servicers can use foreclosure prevention tools to assist distressed

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the banks. In short, the RMFM was a complete waste of time, not because mediation is a bad idea but because of the limited loss mitigation options and because most state court judges could not or would not enforce the program.

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Dodaro, G.L., (2012). Troubled asset relief program: Further actions need to enhance assessments and transparency of housing programs . Retrieved from United States Government Accountability Office, GAO reports website:

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Participating servicers are required to service all eligible loans under the rules of the program unless explicitly prohibited by contract; servicers are required to use reasonable efforts to obtain waivers of limits on

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Reduce the mortgage loan interest rate in increments of .125% to a fixed rate that is not less than 3% (if this exercise results in a below market rate, it will, after 5 years, step up in annual increments to a market

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financial world as it is expected to bring about a slurry of new foreclosures in 5 years when homeowners will once again not be able to pay their mortgage due to the interest rate hike, or the balloon payment.

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Servicers will be required to collect, maintain and transmit records for verification and compliance review, including borrower eligibility, underwriting, incentive payments, property verification, and other

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prevention and mortgage modification program established by the Secretary, in consultation with the Chairperson of the Board of Directors of the FDIC and the Secretary of Housing and Urban Development, that—

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The homeowner did not intentionally default, does not have an ownership interest in other residential real estate and has not been convicted of fraud in the last 10 years under Federal and state law; and

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No payments will be made under the program to the lender/investor, servicer, or borrower unless and until the servicer has first entered into the program agreements with Treasury's financial agent.

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situation will be reviewed on a case-by-case basis using a cash flow budget. This program resulted from a unified effort among the Enterprises, Hope Now and its 27 servicer partners, Treasury, the

125: 814:"Nearly one in four loan modifications in the fourth quarter actually resulted in increased monthly payments". This can occur when late fees or past-due interest are added to the monthly payment. 1091: 1067: 256:. The LMM Program kicked off on April 1, 2013 and unlike the Middle District, the Southern District's program has more requirements for all parties and includes debtors in all chapters, not just 927:

Servicers that modify loans according to the guidelines will receive an up-front fee of $ 1,000 for each modification, plus “pay for success” fees on still-performing loans of $ 1,000 per year.

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disputes and even divorces. However, in these cases, circuit court judges will readily punish a party who fails to attend mediation or who attends but fails to comply with the mediation order.

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The program will provide one-time bonus incentive payments of $ 1,500 to lender/investors and $ 500 to servicers for modifications made while a borrower is still current on mortgage payments.

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entered a new phase on December 9, 2008 for a fast-track program meant to make "hundreds of thousands of mortgages affordable to people who can't currently meet their monthly payments."

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and HOPE NOW relied heavily on the IndyMac model in developing this new protocol". As history unfolds on the U.S. Housing and Finance crisis that caused the persistent recession, the (

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SMP is designed to reduce distressed borrowers' monthly mortgage payments to an amount equal to 38 percent of their monthly gross income. To do so, servicers may, in the following order:

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Incentives to lenders and servicers to modify at risk borrowers who have not yet missed payments when the servicer determines that the borrower is at imminent risk of default

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typically include an $ 1,800 fee to their bankruptcy attorney for handling the modification through their Chapter 13 plan and an approximately $ 300 fee to the mediator.

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for 10 large U.S. cities had fallen in August to a level that was already 5 percent lower than a year ago, with the likelihood of a similar decline over the coming year.

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All borrowers must fully document income, including signed IRS 4506-T, proof of income (i.e. paystubs or tax returns), and must sign an affidavit of financial hardship

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requires Board to make documents, forms, and procedures conform to those under normal FHA loans to the maximum extent possible consistent with statutory requirements.

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Step up the initial interest rate gradually starting in year 6 by increasing it one percentage point each year until reaching the Freddie Mac Weekly Survey rate cap.

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meaning that the net present value of expected cash flow is greater in the modification scenario: the servicer must modify absent fraud or a contract prohibition.

1795: 182:(see Chart 3). The tightening in mortgage credit has placed further downward pressure on home sales and home prices, a situation that now could derail the U.S. 44:, loan modification became a matter of national policy, with various actions taken to alter mortgage loan terms to prevent further economic destabilization. 305:

This is the first time the industry has agreed on an industry standard. The benchmark ratio for calculating the affordable payment is 38 percent of monthly

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Property owner occupancy status will be verified through borrower credit report and other documentation; no investor-owned, vacant, or condemned properties

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Provides lenders and loan servicers with certain compensation to cover administrative costs for each loan modified according to the required standards; and

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The homeowner did not provide materially false information (e.g., lied about income) to obtain the mortgage that is being refinanced into the H4H mortgage.

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The comprehensive plan established pursuant to subsection (a) shall require the commitment of funds made available to the Secretary under title I of the

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Forbearing on a portion of the principal, which will require the borrower to make a balloon payment when the loan matures, is paid off, or is refinanced.

665:, the existing mortgage payment(s) exceeds 31 percent of the borrowers gross monthly income as of March 1, 2008 OR the date of the new loan application. 1617: 398:

The "Streamlined Modification Plan," or SMP, which is an expansion of what many lenders are already doing, was implemented starting December 15, 2008.

1765: 1367: 79: 1892: 1770: 1674: 216:, bankers, mortgage servicers, and consumer groups have been debating the merits of strategies that may help preserve home ownership, minimize 1332: 899:

Servicers will follow a specified sequence of steps in order to reduce the monthly payment to no more than 31% of gross monthly income (DTI).

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The redefault rate was about 50 percent where the monthly payment was unchanged or increased, and 26 percent where the payment was decreased.

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Modify the loan terms based on waterfalls, starting at a front-end 38 percent HTI ratio down to a 31 percent HTI ratio subject to a formal

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Residential mortgage credit quality continues to weaken, with both delinquencies and charge-offs on the rise at FDIC-insured institutions.

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Homeowners who make their payments on time are eligible for up to $ 1,000 of principal reduction payments each year for up to five years.

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refusing to enact FDIC Chairwoman Sheila Bair's controversial loan modification plan, lawmakers are taking matters into their own hands.

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Weekly Survey rate effective as required to meet the target HTI ratio, fixing the adjusted rate and monthly payment amount for 5 years.

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Washington University Law Review - Beyond Fairness: The Economic and Legal Case for a Sweeping Federal Mortgage Modification Mandate

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Raises maximum loan to value (LTV) from 90% to 93% for borrowers above a 31% mortgage debt to income (DTI) ratio or above a 43% ratio

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Fannie Mae and Freddie Mac allow applicants see if their loan is owned by one of them and thus potentially eligible for the program

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lender and the borrower and not lost or misplaced. Instant uploads and verification of transmissions are a hallmark of the portal.

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options, underscores the urgency of finding a workable solution to current problems in the sub-prime mortgage market. Legislators,

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and other bank regulators, the FDIC will monitor loan modification levels and seek adjustments to the protocols if warranted.

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Streamlined Modification Program (SMP) Now Available to Borrowers: Program A Part of an Ongoing Effort to Prevent Foreclosure

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Perform automated loan level underwriting across large segments of the portfolio to support pre-approved bulk mailings.

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Shortcomings of the Residential Mortgage Foreclosure Mediation (RMFM) Program recognized by Panel, Fleysher Law Blog,

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Offer proactive workout solutions designed to address borrowers who have the willingness but limited capacity to pay.

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The Streamlined Modification Program (SMP) was developed in collaboration with the FHFA, the Department of Treasury,

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Provide borrowers the opportunity to stay in their home while making an affordable payment for the life of the loan.

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Measures to prevent and detect fraud, such as documentation and audit requirements, will be central to the program.

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The Program will share with the lender/investor the cost of reductions in monthly payments from 38% DTI to 31% DTI.

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Following the lead of the Middle District, the Southern District of Florida Bankruptcy Court has initiated its own

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Provides loss sharing or guarantees for certain losses incurred if a modified loan should subsequently re-default.

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Foreclosure sale is not imminent and the borrower is currently not in bankruptcy, or has not been discharged from

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Loss Mitigation in Bankruptcy: Judge-Made Programs that Need More Support, Douglass Buckley, ABI Committee News,

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Servicers must enter into the program agreements with Treasury's financial agent on or before December 31, 2009.

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Existing mortgage payment(s) as of March 1, 2008 exceeds 31 percent of the borrowers gross monthly income for

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Modifications can start from now until December 31, 2016; loans can be modified only once under the program

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dramatically since (see Chart 1). As home prices decline, the number of problem mortgages, particularly in

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Input borrower specific income information into the NPV Tool, which provides a real-time workout solution.

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reduction. Similar programs have also been instituted by Bankruptcy courts in New York and Rhode Island.

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structures has heightened the overall risk aversion of investors, resulting in what has become a broader

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The program will include incentives for extinguishing second liens on loans modified under this program.

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South Florida Bankruptcy Courts Implement Mortgage Modification Mediation Program, Fleysher Law Blog,

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Borrower eligibility: Lenders that determine the H4H program is a feasible and effective option for

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Verify income information the borrower provided via check stubs, tax returns, and/or bank statements.

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Mortgage Bankers Association, National Delinquency Survey Q307 (data cited not seasonally adjusted).

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Borrowers who are at least three or more payments past due and are not currently in bankruptcy;

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and provide the lenders a guarantee that the borrower is no longer obligated by those burdens.

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Use a financial model with supportable assumptions to ensure investor interests are protected.

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fully due and payable upon borrower's sale of the property or payoff or maturity of the loan.

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First-lien loans on owner-occupied properties with unpaid principal balance up to $ 729,750

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In the task at hand to make headway against foreclosures and the depressed housing market.

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Mandate that the cost of the modification must be less than the estimated foreclosure loss.

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Eliminates government profit sharing of appreciation over market value of home at time of

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of 2008 in an amount up to $ 100,000,000,000 but in no case less than $ 40,000,000,000.

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eliminates borrower certifications regarding not intentionally defaulting on any debt,

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Neel Kashkari, Interim Assistant Secretary of the Treasury for Financial Stability,

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for her leadership in developing a systematic loan modification protocol. FHFA, the

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The loan is secured by a one-unit property that is the borrower's primary residence;

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Brian D. Montgomery, Assistant Secretary for Housing-Federal Housing Commissioner,

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Merrill Lynch. "Mortgage Credit Losses: How Much, Where, and When?" (July 20, 2007)

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as 38 percent of a household's monthly gross income on a first mortgage payment.

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Property is not abandoned, vacant, condemned, or in a serious state of disrepair.

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in global credit markets. These disruptions have led to a precipitous decline in

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Fannie Mae Provides New Servicer Flexibility to Help Borrowers Avoid Foreclosure

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Congressman Barney Frank Introduces TARP Reform and Accountability Legislation

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MakingHomeAffordable.gov computes estimated payments and has other resources.

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against the property unless they are directly related to property maintenance.

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3 percent upfront mortgage insurance premium and a 1.5 percent annual premium,

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portfolios, is rising. As of third quarter 2007, the percentage of sub-prime

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http://www.fdic.gov/news/news/speeches/archives/2008/chairman/spdec1708.html

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The program abides by the following eligibility and verification criteria:

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As a last resort, provide for principal forbearance, which will result in a

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http://www.abiworld.org/committees/newsletters/consumer/vol10num4/loss.html

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rather than accepting the losses associated with declining property values.

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Extend, if necessary, the amortization and/or term of the loan to 40 years.

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not fall through the cracks because servicers aren't able to get to them.

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Require the borrower to make one payment at the time of the modification.

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Reduces 1.5% annual premium to a range between .55% and .75%, based on

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The loan was not originated as a second home or an investment property.

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The Case for Loan Modification - Federal Deposit Insurance Corporation

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A list of lenders signed on is on the Making Home Affordable website

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eliminates special requirement to collect two years of tax returns,

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Similar incentives will be paid for Hope for Homeowner refinances.

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Higher limits allowed for owner-occupied properties with 2-4 units

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Authorizes payments to servicers participating in successful refis

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The existing mortgage was originated on or before January 1, 2008;

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conforming mortgage loans originated on or before January 1, 2009;

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conforming mortgage loans originated on or before January 1, 2008;

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http://www.freddiemac.com/sell/guide/bulletins/pdf/bll121208.pdf

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There are free resources available for potential applicants.

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Freddie Mac is appointed the compliance officer of the program.

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losses will assess the homeowner's eligibility for the program:

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Remarks on GSE, HOPE NOW streamlined loan modification program

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eliminates prohibition against taking out future second loans,

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Acquired or bankrupt banks in the late 2000s financial crisis

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Analysis of the results of the government-sponsored programs

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practiced in the United States since the 1930s. During the

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eliminates originator liability for first payment default,

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Dodd–Frank Wall Street Reform and Consumer Protection Act

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Mortgagee Letter – Hope for Homeowners Service Guidelines

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Payments to servicers, lenders, and responsible borrowers

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Extending the length of the mortgage loan as appropriate;

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Extend the term of the mortgage loan by up to 480 months;

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http://www.freddiemac.com/sell/factsheets/streamrefi.htm

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lending, a significant reduction in the availability of

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for Homeowners refinancing are acceptable alternatives.

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House Financial Services Committee Democratic Staff. "

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Only one-unit, owner-occupied, primary residences; and

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Remarks on the IndyMAC Loan Modification Announcement

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Neighborhood Assistance Corporation of America (NACA)

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Act was challenged by a bank which argued before the

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Fannie and Freddie Offer New Plan to Help Homeowners

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This trend, in tandem with upward pricing of hybrid

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Public–Private Investment Program for Legacy Assets

1459:"Loan modifications rise; many don't pare payments" 1168:

United States House Committee on Financial Services

765:The Troubled Assets Relief Program is a systematic 292: 1410:U.S. Department of Housing and Urban Development, 969:Foreclosure rescue and mortgage modification scams 946: 1625: 1195: 1193: 995:HUD.org helps applicants find a local counselor. 760: 80:Home Building & Loan Association v. Blaisdell 1874: 1527: 1525: 964:Warnings to people looking to apply for program 157:S&P/Case-Shiller Composite Home Price Index 1771:Federal takeover of Fannie Mae and Freddie Mac 1550: 1548: 1546: 1461:. Associated Press. 2009-04-03. Archived from 1190: 532: 1611: 1435: 1433: 859:Loans originated on or before January 1, 2009 850: 146:have repeatedly downgraded assumptions about 1741:Emergency Economic Stabilization Act of 2008 1522: 1349: 1347: 1345: 1252:Statement of FHFA Director James B. Lockhart 1074:Statement of FHFA Director James B. Lockhart 432:Reduce interest rate to as low as 3 percent. 376:advances and costs, if allowed by state law; 208:(ARM) loans, falling home prices, and fewer 1811:2009 Supervisory Capital Assessment Program 1781:Homeowners Affordability and Stability Plan 1543: 1380: 1378: 1376: 583: 337: 1821:Term Asset-Backed Securities Loan Facility 1618: 1604: 1430: 1321: 1319: 1317: 1315: 781: 422:Capitalize delinquent interest and escrow. 1736:Housing and Economic Recovery Act of 2008 1401:. Federal Reserve System. (2008, October) 1342: 1271: 1269: 1267: 1166:(December 6, 2007). Testimony before the 804:Office of the Comptroller of the Currency 254:loss mitigation mediation (“LMM”) program 1373: 1306: 704:Updated Hope for Homeowners improvements 614: 1852:Financial position of the United States 1312: 1275:Federal National Mortgage Association, 1183:Federal Deposit Insurance Corporation, 983:Free resources for potential applicants 699:The HUDS fact sheet gives full details. 323:achieve the same affordability target. 232:Loss Mitigation Mediation (LMM) Program 162:The complexity of many mortgage-backed 1893:Mortgage industry of the United States 1875: 1518:http://www.gao.gov/products/GAO-12-783 1357:" (December 18, 2008) (press release). 1295:. HOPE Now. 2008-11-11. Archived from 1264: 1234: 1232: 1017: 882:Loan modification terms and procedures 342:The SMP eligibility criteria include: 86: 47: 1599: 1370:" (December 8, 2008) (press release). 1158: 1156: 1154: 565:of the loan, if allowed by state law; 93:Federal Deposit Insurance Corporation 1427:" (January 9, 2009) (press release). 1261:(November 11, 2008) (press release). 828:Home Affordable Modification Program 822:Home Affordable Modification Program 788:Emergency Economic Stabilization Act 419:Return the loan to a current status. 178:loans, and higher interest rates on 1229: 477:Compare the cost of foreclosure to 13: 1225:http://fleysherlaw.com/blog/?p=666 1201:http://fleysherlaw.com/blog/?p=105 1151: 629:Hope for Homeowners Plan (HUD)/FHA 14: 1904: 1569: 832: 576:modification, whichever is lower; 353:At least three payments past due; 226:United States Treasury Department 1277:Streamlined Modification Program 1090: This article incorporates 1085: 1066: This article incorporates 1061: 978:Bank crisis in the united states 687:with the Federal government, and 675: 363:(LTV) of 90 percent or more; and 293:Streamlined modification process 284:While mortgage modification and 194: 135: 123: 21:is the systematic alteration of 1509: 1491: 1473: 1451: 1445: 1417: 1404: 1391: 1360: 1325: 1282: 1245: 1162:Sheila C. Bair, FDIC Chairman, 947:Transparency and accountability 732:Administrative simplification: 690:Prohibition against new junior 685:Equity and appreciation sharing 438:Forbear principal if necessary. 401: 272:Election to participate in the 69:that it was a violation of the 1806:Primary Dealer Credit Facility 1675:Role of credit rating agencies 1635:Background / timeline 1217: 1205: 1177: 1174:(2007), Vol. 1, No. 3, p. 22. 1164:The Case for Loan Modification 1142: 1133: 1127: 1111: 761:Troubled Assets Relief Program 502:since the loan was originated. 316:Federal Housing Finance Agency 312:Federal Housing Administration 1: 1826:Troubled Asset Relief Program 1731:Economic Stimulus Act of 2008 1627:U.S. subprime mortgage crisis 1055: 744:eliminates March 1, 2008 31% 709:Eliminates 3% upfront premium 451:Cap the interest rate at the 408:George W. Bush administration 372:Capitalize accrued interest, 1888:United States housing bubble 1883:Banking in the United States 1666:United States housing bubble 1414:(revised September 4, 2008). 808:Office of Thrift Supervision 610:ratio of 90 percent or more. 7: 1028: 972:servicer when they do not. 533:Fannie Mae/Freddie Mac Plan 346:Conforming conventional or 142:During 2007, investors and 67:United States Supreme Court 10: 1909: 1756:Capital Assistance Program 1698:2007–2008 financial crisis 837: 825: 625:MakingHomeAffordable.gov. 561:advances and costs to the 1857:Foreclosure rescue scheme 1839: 1766:Federal Reserve responses 1721: 1713:Indirect economic effects 1688: 1670:housing market correction 1656: 1633: 1185:Quarterly Banking Profile 847:delinquent are eligible. 495:“reasonably foreseeable”. 113:adjustable-rate mortgages 1761:Capital Purchase Program 1503:makinghomeaffordable.gov 1412:Loan Modification Option 1103:United States Government 1079:United States Government 1012:Freddie Mac Loan Look Up 851:Eligibility requirements 584:Eligibility requirements 513:) commend FDIC Chairman 338:SMP eligibility criteria 299:streamlined modification 206:adjustable-rate mortgage 42:Subprime mortgage crisis 1776:Government intervention 1335:" (December 12, 2008). 1009:Fannie Mae Loan Look Up 810:reported on 2009-04-03 782:Commitment of resources 635:HOPE for Homeowners Act 606:Current mark-to-market 359:Current mark-to-market 57:payments. In 1933, the 1643:Background information 1485:financialstability.gov 1092:public domain material 1068:public domain material 1003:Making Home Affordable 150:credit performance. A 615:New servicer guidance 330:, and members of the 297:The adoption of this 1862:Property derivatives 1801:Regulatory responses 1242:(November 11, 2008). 1024:List of HAMP Lenders 746:debt-to-income ratio 659:fixed-rate mortgages 500:Chapter 7 bankruptcy 489:Borrower eligibility 1680:Government policies 1465:on April 12, 2009. 1187:for 2007 Quarter 3. 1045:Mortgage assumption 1018:Lender participants 87:United States 2000s 48:United States 1930s 1831:Wall Street reform 1816:Tea Party protests 1388:(October 1, 2008). 1257:2008-12-19 at the 1124:(August 20, 2008). 714:risk-based pricing 184:economic expansion 1870: 1869: 1791:Loan modification 1786:Hope Now Alliance 1397:Bucholz, David. 1331:Barbara Kiviat, " 1120:, FDIC Chairman, 1050:Predatory lending 563:principal balance 427:net present value 332:HOPE NOW Alliance 95:(FDIC) chairman, 91:According to the 19:Loan modification 1900: 1620: 1613: 1606: 1597: 1596: 1564: 1563: 1552: 1541: 1540: 1529: 1520: 1513: 1507: 1506: 1495: 1489: 1488: 1477: 1471: 1470: 1455: 1449: 1443: 1437: 1428: 1421: 1415: 1408: 1402: 1395: 1389: 1382: 1371: 1364: 1358: 1351: 1340: 1329: 1323: 1310: 1304: 1303: 1301: 1294: 1286: 1280: 1273: 1262: 1249: 1243: 1236: 1227: 1221: 1215: 1209: 1203: 1197: 1188: 1181: 1175: 1160: 1149: 1146: 1140: 1137: 1131: 1125: 1115: 1106: 1089: 1088: 1082: 1065: 1064: 555:accrued interest 198: 144:ratings agencies 139: 127: 54:Great Depression 31:Great Depression 1908: 1907: 1903: 1902: 1901: 1899: 1898: 1897: 1873: 1872: 1871: 1866: 1835: 1717: 1703:Great Recession 1684: 1652: 1648:Impact timeline 1629: 1624: 1572: 1567: 1554: 1553: 1544: 1531: 1530: 1523: 1514: 1510: 1497: 1496: 1492: 1479: 1478: 1474: 1457: 1456: 1452: 1446: 1438: 1431: 1422: 1418: 1409: 1405: 1396: 1392: 1383: 1374: 1365: 1361: 1352: 1343: 1330: 1326: 1313: 1307: 1299: 1292: 1288: 1287: 1283: 1274: 1265: 1259:Wayback Machine 1250: 1246: 1237: 1230: 1222: 1218: 1210: 1206: 1198: 1191: 1182: 1178: 1161: 1152: 1147: 1143: 1138: 1134: 1128: 1116: 1112: 1095: 1086: 1071: 1062: 1058: 1031: 1020: 985: 966: 949: 921: 884: 853: 840: 835: 830: 824: 800: 784: 763: 706: 678: 631: 617: 586: 535: 527:Great Recession 404: 388:balloon payment 340: 295: 234: 89: 71:contract clause 50: 12: 11: 5: 1906: 1896: 1895: 1890: 1885: 1868: 1867: 1865: 1864: 1859: 1854: 1849: 1847:Error accounts 1843: 1841: 1840:Related topics 1837: 1836: 1834: 1833: 1828: 1823: 1818: 1813: 1808: 1803: 1798: 1793: 1788: 1783: 1778: 1773: 1768: 1763: 1758: 1753: 1748: 1743: 1738: 1733: 1727: 1725: 1719: 1718: 1716: 1715: 1710: 1705: 1700: 1694: 1692: 1686: 1685: 1683: 1682: 1677: 1672: 1662: 1660: 1654: 1653: 1651: 1650: 1645: 1639: 1637: 1631: 1630: 1623: 1622: 1615: 1608: 1600: 1594: 1593: 1588: 1583: 1578: 1571: 1570:External links 1568: 1566: 1565: 1542: 1521: 1508: 1490: 1472: 1450: 1444: 1429: 1416: 1403: 1390: 1372: 1359: 1341: 1324: 1311: 1305: 1302:on 2009-01-17. 1281: 1263: 1244: 1228: 1216: 1204: 1189: 1176: 1172:FDIC Quarterly 1150: 1141: 1132: 1126: 1118:Sheila C. Bair 1109: 1108: 1107: 1083: 1057: 1054: 1053: 1052: 1047: 1042: 1037: 1030: 1027: 1019: 1016: 1015: 1014: 1005: 999: 993: 984: 981: 965: 962: 961: 960: 957: 956:documentation. 953: 948: 945: 944: 943: 940: 937: 934: 931: 928: 925: 920: 917: 916: 915: 912: 908: 904: 900: 897: 893: 889: 888:participation. 883: 880: 879: 878: 875: 872: 869: 866: 863: 860: 852: 849: 839: 836: 834: 833:Program Formed 831: 826:Main article: 823: 820: 819: 818: 815: 799: 796: 783: 780: 779: 778: 775: 762: 759: 758: 757: 756: 755: 752: 749: 742: 739: 736: 730: 727: 720: 717: 710: 705: 702: 701: 700: 696: 695: 688: 682: 677: 674: 673: 672: 669: 666: 655: 651: 650: 643: 630: 627: 616: 613: 612: 611: 604: 601: 598: 585: 582: 581: 580: 577: 569: 566: 534: 531: 507: 506: 503: 496: 491: 490: 486: 485: 482: 475: 472: 469: 465: 464: 460: 459: 456: 449: 445: 444: 440: 439: 436: 433: 430: 423: 420: 416: 415: 403: 400: 392: 391: 384: 380: 377: 370: 367: 364: 357: 354: 351: 339: 336: 294: 291: 233: 230: 164:securitization 97:Sheila C. Bair 88: 85: 49: 46: 9: 6: 4: 3: 2: 1905: 1894: 1891: 1889: 1886: 1884: 1881: 1880: 1878: 1863: 1860: 1858: 1855: 1853: 1850: 1848: 1845: 1844: 1842: 1838: 1832: 1829: 1827: 1824: 1822: 1819: 1817: 1814: 1812: 1809: 1807: 1804: 1802: 1799: 1797: 1794: 1792: 1789: 1787: 1784: 1782: 1779: 1777: 1774: 1772: 1769: 1767: 1764: 1762: 1759: 1757: 1754: 1752: 1749: 1747: 1744: 1742: 1739: 1737: 1734: 1732: 1729: 1728: 1726: 1724: 1720: 1714: 1711: 1709: 1706: 1704: 1701: 1699: 1696: 1695: 1693: 1691: 1687: 1681: 1678: 1676: 1673: 1671: 1667: 1664: 1663: 1661: 1659: 1655: 1649: 1646: 1644: 1641: 1640: 1638: 1636: 1632: 1628: 1621: 1616: 1614: 1609: 1607: 1602: 1601: 1598: 1592: 1589: 1587: 1584: 1582: 1579: 1577: 1574: 1573: 1561: 1557: 1551: 1549: 1547: 1538: 1534: 1528: 1526: 1519: 1512: 1504: 1500: 1494: 1486: 1482: 1476: 1469: 1464: 1460: 1454: 1448: 1442: 1436: 1434: 1426: 1420: 1413: 1407: 1400: 1394: 1387: 1381: 1379: 1377: 1369: 1366:Fannie Mae, " 1363: 1356: 1353:Fannie Mae, " 1350: 1348: 1346: 1338: 1334: 1328: 1322: 1320: 1318: 1316: 1309: 1298: 1291: 1285: 1278: 1272: 1270: 1268: 1260: 1256: 1253: 1248: 1241: 1235: 1233: 1226: 1220: 1214: 1208: 1202: 1196: 1194: 1186: 1180: 1173: 1169: 1165: 1159: 1157: 1155: 1145: 1136: 1130: 1123: 1119: 1114: 1110: 1104: 1100: 1099: 1093: 1084: 1080: 1076: 1075: 1069: 1060: 1059: 1051: 1048: 1046: 1043: 1041: 1038: 1036: 1033: 1032: 1026: 1025: 1013: 1010: 1006: 1004: 1000: 998: 994: 990: 989: 988: 980: 979: 973: 970: 958: 954: 951: 950: 941: 938: 935: 932: 929: 926: 923: 922: 913: 909: 905: 901: 898: 894: 890: 886: 885: 876: 873: 870: 867: 864: 861: 858: 857: 856: 848: 844: 829: 816: 813: 812: 811: 809: 805: 795: 791: 789: 776: 773: 772: 771: 768: 753: 750: 747: 743: 740: 737: 734: 733: 731: 728: 725: 721: 718: 715: 711: 708: 707: 698: 697: 693: 689: 686: 683: 680: 679: 676:Original cost 670: 667: 664: 660: 656: 653: 652: 648: 644: 640: 639: 638: 636: 626: 623: 609: 608:loan-to-value 605: 602: 599: 596: 592: 588: 587: 578: 574: 573:mortgage loan 571:Reducing the 570: 567: 564: 560: 556: 552: 551: 550: 546: 544: 540: 530: 528: 524: 520: 516: 512: 504: 501: 497: 493: 492: 488: 487: 483: 480: 476: 473: 470: 467: 466: 462: 461: 457: 454: 450: 447: 446: 442: 441: 437: 434: 431: 428: 424: 421: 418: 417: 413: 412: 411: 409: 399: 396: 389: 385: 381: 378: 375: 371: 368: 365: 362: 361:loan to value 358: 355: 352: 349: 345: 344: 343: 335: 333: 329: 324: 321: 317: 313: 308: 303: 300: 290: 287: 282: 278: 275: 270: 266: 263: 259: 255: 250: 246: 242: 238: 229: 227: 221: 219: 215: 211: 207: 202: 199: 197: 192: 191: 187: 185: 181: 177: 173: 169: 165: 160: 158: 153: 152:Merrill Lynch 149: 145: 140: 138: 133: 132: 128: 126: 121: 120: 116: 114: 110: 106: 100: 98: 94: 84: 82: 81: 76: 72: 68: 64: 60: 55: 45: 43: 38: 36: 32: 27: 24: 23:mortgage loan 20: 16: 1790: 1668: / 1559: 1537:hmpadmin.com 1536: 1511: 1502: 1493: 1484: 1475: 1466: 1463:the original 1453: 1447: 1419: 1406: 1393: 1362: 1336: 1327: 1308: 1297:the original 1284: 1247: 1219: 1207: 1179: 1144: 1135: 1129: 1113: 1097: 1073: 1021: 992:appointment. 986: 974: 967: 896:assumptions. 854: 845: 841: 801: 792: 785: 764: 632: 618: 591:conventional 547: 536: 523:IndyMac Bank 511:IndyMac Bank 508: 429:(NPV) floor. 405: 402:IndyMAC plan 397: 393: 341: 325: 304: 296: 283: 279: 271: 267: 251: 247: 243: 239: 235: 222: 218:foreclosures 203: 200: 193: 189: 188: 161: 141: 134: 130: 129: 122: 118: 117: 101: 90: 78: 75:Constitution 51: 39: 35:foreclosures 18: 17: 15: 1560:ustreas.gov 1170:; see also 767:foreclosure 748:(DTI) test, 589:Conforming 553:Adding the 549:following: 543:Freddie Mac 515:Sheila Bair 453:Freddie Mac 328:Freddie Mac 274:LMM program 210:refinancing 180:jumbo loans 168:illiquidity 52:During the 40:During the 1877:Categories 1708:Writedowns 1056:References 647:mitigating 539:Fannie Mae 314:(FHA) and 286:bankruptcy 258:Chapter 13 214:regulators 63:Moratorium 26:agreements 1723:Responses 622:borrowers 406:With the 262:Chapter 7 172:sub-prime 148:sub-prime 105:sub-prime 61:Mortgage 59:Minnesota 1255:Archived 1029:See also 806:and the 479:mitigate 1690:Impacts 997:HUD.gov 911:income. 838:Purpose 481:losses. 320:IndyMac 190:Chart 3 131:Chart 2 119:Chart 1 73:of the 1658:Causes 1556:"Home" 1533:"Home" 1499:"Home" 1481:"Home" 1035:Escrow 661:; For 559:escrow 383:rate); 374:escrow 1468:show. 1300:(PDF) 1293:(PDF) 1094:from 1070:from 692:liens 595:jumbo 509:"We ( 348:jumbo 307:gross 176:Alt-A 109:Alt-A 77:. 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