Is the Home Affordable Modification mandatory or can investors or servicers choose not to participate?
Investor and servicer participation in the program is voluntary. However, the government is offering substantial incentives to servicers, investors and borrowers, and it is expected that most major servicers will participate. Participating servicers will sign a contract with Treasurys financial agent, through which they will agree to review every potentially eligible borrower who calls or writes asking to be considered for the program. All loans that meet eligibility requirements and test positive for modifications in the NPV model must be modified, unless there is fraud or the modification is prohibited by the pooling and servicing agreement that govern the servicing of the loan. As contracts are signed, a list of participating servicers will be available on the internet at www.FinancialStability.gov. Participation will be mandatory for any institution that accepts future funding from Treasurys Financial Stability Program.
Investor and servicer participation in the program is voluntary. However, the government is offering substantial incentives to servicers, investors and borrowers, and it is expected that most major servicers will participate. Participating servicers will sign a contract with Treasury’s financial agent, through which they will agree to review every potentially eligible borrower who calls or writes asking to be considered for the program. All loans that meet eligibility requirements and test “positive” for modifications in the NPV model must be modified, unless there is fraud or the modification is prohibited by the pooling and servicing agreement that govern the servicing of the loan. As contracts are signed, a list of participating servicers will be available on the internet at www.FinancialStability.gov. Participation will be mandatory for any institution that accepts future funding from Treasury’s Financial Stability Program. 24.
