Treasury Issues New HAMP Rule Requiring Single Point-of-Contact

The ""U.S. Treasury"":http://www.treasury.gov released updated guidance for the Home Affordable Modification Program (HAMP) this week requiring certain servicers to provide borrowers with a single point-of-contact through the entire default resolution process.

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The new directive applies only to the largest servicers â€" those with a program participation cap of $75 million or more â€" however Treasury says all servicers participating in HAMP are encouraged to adopt the new guidance for providing borrowers with a single point-of-contact.

In addition to HAMP, the new rule also applies to the Home Affordable Foreclosure Alternatives (HAFA) program and the Home Affordable Unemployment Program (UP). However, it does not encompass second lien mortgage loans that may be eligible for the Second Lien Modification Program (2MP) under the Making Home Affordable umbrella.

According to the new guidance issued, servicers must assign each borrower a dedicated ""relationship manager"" who is responsible for communicating and working with

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the borrower throughout the entire process, including any home retention and non-foreclosure liquidation options, and, if the loan is ultimately referred to foreclosure, that same relationship manager must be available to respond to borrower inquiries regarding the status of the foreclosure.

No later than September 1, servicers must assign a relationship manager to any borrower who is potentially eligible or who requests consideration for HAMP or one of the applicable government programs.

For borrowers who are in the process of being evaluated for HAMP, UP, or HAFA, who are in a trial mod plan or an UP forbearance plan, or who have executed a HAFA short sale or deed-in-lieu agreement, servicers have until November 1 to connect them with a dedicated relationship manager.

Within five business days of the assignment, the relationship manager must provide written notice to the borrower which includes a toll-free telephone number and at least one other method by which the borrower may directly contact the relationship manager, and the relationship manager must attempt to initiate contact with the borrower ""promptly following the assignment,"" according to Treasury.

The relationship manager is responsible for communicating to the borrower all options available for resolving their delinquency, and for coordinating maintenance and tracking of documents provided by the borrower to ensure the borrower is notified promptly if additional information is needed and to eliminate the need for the borrower to resubmit the same paperwork.

The single point-of-contact supplemental directive, along with specific details on the relationship manager's responsibilities, can be ""accessed online"":https://www.hmpadmin.com/portal/programs/docs/hamp_servicer/sd1104.pdf.