What’s after HAMP? MBA proposes loan modification program

"One Mod: Principles for Post-HAMP Loan Modifications"

The Mortgage Bankers Association revealed a new program proposal on Friday that is designed to be successor program to the Home Affordable Modification Program, which is scheduled to wrap up at the end of this year.

The new program, “One Mod: Principles for Post-HAMP Loan Modifications,” draws upon the experiences of lenders familiar with HAMP to formulate universal principles that should be applied to a future program, the MBA stated in its announcement.

Through the program, eligible borrowers can receive at least a 20% payment reduction while also not having to undergo to the “excessive documentation requirements that have caused hardship for HAMP applicants.”

Both HAMP and the Home Affordable Refinance Program were originally launched in 2009 to provide relief to borrowers by lowering their monthly payments. Although both were set to expire on Dec. 31, 2013, both have since continuously moved around, with HAMP slated to end this year and HARP on Sept. 30, 2017.

Currently, the Federal Housing Finance Agency already created new refinance product that it is set to launch toward the end of 2017 that falls along the same lines as HARP, but there isn’t one for HAMP.

The Future of Loss Mitigation Task Force, a diverse MBA working group consisting of representatives from 20 member companies, developed this new proposal to try and fill the void when HAMP ends. The Task Force is co-chaired by Alex McGillis of Quicken Loans and Erik Schmitt of JPMorgan Chase.

“MBA’s task force recognizes that the industry, borrowers and investors need a successor to HAMP that is consistent and can be widely scaled,” said Pete Mills, senior vice president of residential policy and member services at the Mortgage Bankers Association.

“Application of the Task Force’s principles and the ‘One Modification’ or ‘One Mod’, will go a long way towards offering deep payment relief for struggling homeowners and a positive economic outcome for investors,” Mills continued. “We look forward to continued discussions with government agencies, the GSEs and other stakeholders about these principles and the proposal.”

According to the MBA, One Mod incorporates four guiding themes that drive successful loss mitigation programs: accessibility, affordability, sustainability and transparency. For more details from the MBA on the program check here.

 “The primary focus of this proposal is to provide a path that can help as many families as possible retain homeownership by improving the customer experience and providing deep and meaningful payment relief.  The One Mod program offers a simple and transparent solution to struggling homeowners in need of assistance,” said Erik Schmitt, product executive for mortgage banking at Chase.

Mike Malloy, vice president of Servicing for Quicken Loans, also commented on the news saying, “Developing One Mod was a tremendous collaborative effort by lenders and other stakeholders, big and small, to develop a simpler and more streamlined process that provides meaningful help to those who are under serious hardship.”

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