The Home Affordable Modification Program will expire at the end of this year, and experts from the industry talked about its replacement: One Mod: Principles for Post-HAMP Loan Modification at the Mortgage Bankers Association annual conference this week.
The MBA revealed its new program proposal at the end of September. While the Federal Housing Finance Agency already created a new program to replace the Home Affordable Refinance Program, nothing is in place to take over for HAMP.
“One Mod is a universal framework designed to provide the customer meaningful payment relief early in delinquency,” JPMorgan Chase Product Executive Erik Schmitt told HousingWire. “This is achieved through the creation of a simplified customer experience and a product designed to provide meaningful payment relief, which is the key driver of re-performance.”
“Additionally, the product is durable, in that it is designed to provide customers with assistance across a broad range of economic environments,” Schmitt said.
One Mod will be an improvement from HAMP as experts analyze what worked and what didn’t.
“We’re taking the lessons that we learned from HAMP and finding ways to only require the specific documentation used to drive payment reduction,” Alex McGillis of Quicken Loans told HousingWire. “The data from HAMP shows that payment reduction is the biggest driver in reducing re-defaults.”
There will be several changes to the new program as the industry shifts towards what Yvette Gilmore, Freddie Mac vice president of servicing performance management, calls a non-crisis program.
One of the major shifts includes an increase in the program’s availability.
“The focus of One Mod is to maximize the number of homes saved, which is achieved through increasing program accessibility and providing more sustainable solutions to prevent default,” Schmitt said.
Also, the proposed program will differ when it comes to the regulation that controls it. At the session, the MBA asked Laurie Maggiano, the Consumer Financial Protection Bureau program manager, what the industry can expect when it comes to new regulation for loan modification.
“We just published a 900-page rule, what else do you want?” Maggiano joked. Then, on a more serious note, she added, “Because the rule doesn’t say what a modification should look like, and I don’t expect to go there, I don’t expect any more regulation.”
McGillis summed up the goals for the new program:
“Everyone should have the ability or chance to save their home no matter what they’re going through,” he said at the session.