Attorney Generals’ Settlement from 2011
Bank of America
See an example of a Bank of America mod.
Congress is debating whether to allow judges to cram down mortgages, meaning to reduce the balance owing to the value of the property. Read this report by Martin Andelman. December 8, 2009.
HAMP – Making Home Affordable
Making Home Affordable Handbook 4.4 (September 16, 2013)
A federal district court judge in Southern California says that HAMP is enforceable and not just voluntary and that borrowers are third-party beneficiaries of the contract between HUD and the lenders.
HAMP Training for servicers, Part 1
HAMP Training for Servicers, Part 2
You can look up your lender and find out if it has signed up with the Feds and is cooperating with the Making Home Affordable program.
Net Present Value Analysis
California law, California Civil Code 2923.6, sets a policy that a lender must accept a modification proposed by a borrower if the lender would make more money or lose less money under the modification proposed than the lender would lose if the lender foreclosed. Washington does not have such a law at this time, but Washington often models its laws after California’s. Also the California statute has persuasive precendent. It is not clear just how binding this statute will turn out to be when it is tested in court.
Lenders which are subject to the Home Affordable Program guidelines are subject to a similar requirement. Go to page 122:
All loans that meet the applicable HAMP eligibility criteria in Section 1 must be evaluated using a standardized NPV test that compares the NPV result for a modification to the NPV result for no modification. … Using the applicable standard modification waterfall, if the NPV result for the modification scenario is greater than the NPV result for no modification, the result is deemed “positive”. If the NPV result for no modification is greater than the NPV result for the modification scenario using the applicable standard modification waterfall, the modification result is deemed “negative”. If there is a positive NPV result under the HAMP Tier 1 standard modification waterfall, the servicer must offer the HAMP Tier 1 TPP regardless of the HAMP Tier 2 NPV result. If there is a negative NPV result under the HAMP Tier 1 standard modification waterfall and the investor has authorized a different threshold, or the modification has excessive forbearance and the investor has authorized the service to exceed the forbearance limit, the servicer may offer the HAMP Tier 1 TPP. If the borrower is not offered a HAMP Tier 1 TPP and is NPV positive under the HAMP Tier 2 standard modification waterfall, the servicer must offer the HAMP Tier 2 TPP. If there is a negative NPV result under the HAMP Tier 2 standard modification waterfall, the servicer may, based on investor guidance, offer the HAMP Tier 2 TPP.
Pooling and Servicing Agreements