New Supplemental Directive Provides Important HAMP UpdatesJanuary 29, 2010, Single-Family Advisory E-mail

The U.S. Department of the Treasury (Treasury) recently published a Supplemental Directive for the Home Affordable Modification program (HAMP) on HMPadmin.com. Supplemental Directive 10-01, entitled "Program Update and Resolution of Active Trial Modifications,' provides the following information:

A HAMP program change that eliminates stated income Trial Period Plans and requires full verification of borrower eligibility after the Servicer receives the 'Initial Package', which includes the following documentation:
- Request for Modification and Affidavit (RMA) Form
- IRS Form 4506-T or 4506T-EZ
- Evidence of Income
This new program requirement applies for all HAMP Trial Period Plans with effective dates on or after June 1, 2010. This includes Trial Period Plans sent to borrowers on or after April 16, 2010. Servicers are strongly encouraged to transition to a verified income process as soon as possible. We recommend new evaluations with a net present value (NPV) run date of April 1, 2010 or after, be conducted based on full verification of borrower eligibility.
Servicer and borrower timelines for acknowledgement and review of the documents included in the "Initial Package".
Further guidance to Supplemental Directive 09-10, "Temporary Review Period for Active Trial Modifications Scheduled to Expire on or before January 31, 2010," to assist Servicers in making final HAMP eligibility determinations for borrowers who are in active Trial Periods that are set to end by January 31, 2010.

Important Freddie Mac Requirements Regarding Supplemental Directive 10-01

Despite any requirements provided in Supplemental Directive 10-01, Servicers must

Continue to follow the imminent default requirements that were announced in our January 26, 2010 Single-Family Seller/Servicer Guide (Guide)Bulletin.
Follow the NPV requirements in our Guide Chapter C65.6 as amended by our November 2, 2009, GuideBulletin, including those under the section 'Determining when to run the Treasury NPV Model', which require Servicers to re-evaluate any borrower who started a Trial Period with stated income and, if needed, rerun the NPV test. However, Servicers may forbear principal in accordance with Supplemental Directive 10-01, even when the NPV result is less than zero, but not less than negative $5,000.
Offer borrowers who are first determined to be in imminent default a Trial Period Plan, if eligible, based on full verification of borrower eligibility beginning March 1, 2010.

Future Guide Update

We will update our Guide requirements in a future Guide Bulletin to reflect the guidance outlined in Supplemental Directive 10-01. Until this update is communicated, Servicers must adhere to the requirements outlined in the new Supplemental Directive 10-01 and the imminent default and NPV requirements highlighted above. It is important for Servicers to thoroughly review the directive in its entirety for complete details on these requirements.

For more information

Review Supplemental Directive 10-01 and Supplemental Directive 09-10.
Visit Freddie Mac’s Home Affordable Modification program Web site.
Review information for borrowers about the federal Making Home Affordable program on the U.S. Department of Treasury’s Web site.