Streamlining with the IRS! All these programs; all the money given; but NO implimentation of guidelines so everyone is on the same page - and now the IRS is going to help with the process. What do you think?The Obama administration is poised to unveil two new features that would widen its assistance to troubled homeowners in danger of foreclosure, a Treasury Department official said this week.Speaking to participants at the annual Mortgage Bankers Association convention, Laurie Maggiano of the Treasury’s Office of Homeownership Protection said regulators would roll out a new, streamlined application for borrowers seeking a loan modification under the government’s Making Home Affordable Modification Program. She added that federal authorities also were on the verge of announcing a new program to assist homeowners that don’t qualify for modifications.“We are hoping to set an industry standard so investors will know exactly what they can expect,” Maggiano told listeners at the San Diego conference. “There’s really no magic. We haven’t reinvented the wheel.”Nevertheless, the proposals could be manna from heaven for troubled homeowners as well as lenders and servicers who have been stalled by the government’s ponderous modification bureaucracy. As DS News previously reported, last week the Congressional Oversight Panel tasked with supervising the government’s $700 billion financial bailout delivered a blistering critique of the government’s foreclosure mitigation programs, saying enough wasn’t being done to keep owners in their homes.The paperwork jam – in which missing, incomplete or erroneous filings can grind the modification process to a halt – has been an issue with HAMP from the start, Douglas Potolsky, a senior vice president with Chase Home Loans, told reporters. “Getting those loans to the finish line is tough,” Potolsky said. “I think the streamlining will help dramatically.”At the same time, concerns have grown over whether HAMP reaches enough borrowers to make a difference in the wider housing-based economy. The MBA in particular, as well as the servicers’ advocacy group HOPE NOW, has argued that too many homeowners are – or ought to be – ineligible for HAMP modifications, and so far the government has done very little to assist that population.According to Maggiano, the Treasury will offer a schedule of financial incentives to servicers for negotiating short sales or deeds in lieu of foreclosure for the most troubled borrowers in their portfolio that can’t obtain a modification. That plan, too, will come with a streamlined application for fast action, and it will put caps on how much of a payout can go to lesser lien holders who waive claims to a short sale or deed-in-lieu property.The program will not be for every mortgage investor, Maggiano warned. Some would choose to “walk away” from the incentives because they weren’t as high as might be hoped.Nevertheless, she said that much tussling between borrowers, servicers and investors would be cut down by that plan and the new HAMP paperwork requirements.Those new requirements include just two documents to be filled out and signed, a vast improvement over the mountain of paperwork that accompanied early modification applications, Maggiano said.She added that the government also would process those applications with a mass-automation computer system provided by an agency that knows a thing or two about high volume and complicated filings: The Internal Revenue Service. Under that plan, Maggiano told the crowd, servicers should be able to get a yes-or-no answer within two days of filing a completed request, she said.Borrowers who already are in the trial modification pipeline will get an extra two months to fill out the new simpler paperwork, she added.
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