PR Log (Press Release) – Mar 28, 2010 – HAMP Alternative Announced in Another Attempt to Reduce Foreclosures
by Jann Swanson on
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Fannie Mae has introduced another strategy to increase the effectiveness of the government foreclosure initiatives: The Alternative Modification Program

HAMP has been widely criticized for what has so far been a poor record of converting home mortgages entered into a required three month trial phase into permanent modifications.  As of the end of February HAMP (which also includes non-Fannie Mae and Freddie Mac mortgages) had finalized modifications on only 168,701 loans out of the 1.354 million who had been extended invitations to participate in the program.

Effective for mortgage loans in active HAMP trials initiated prior to March 1, 2010, servicers are now required to consider the Alternative Modification™ (Alt Mod™) prior to initiating foreclosure proceedings for those borrowers who were eligible for and accepted into a Home Affordable Modification Program (HAMP) trial period plan but were subsequently denied a permanent modification because of eligibility restrictions or failure to submit proper documentation. Servicers have maintained that borrowers were delaying or failing to provide the required documentation while borrowers and community groups have accused servicers of losing or mishandling the information.