HAMP Risk on the Rise: A Complicated Regulatory Scheme Under the Spotlight
The Home Affordable Modification Program (“HAMP”) has had a rocky history in the three short years since its inception. Although participation in the Treasury Department’s HAMP program is voluntary, loan investors, including Fannie Mae and Freddie Mac, require their mortgage servicers to participate in their respective HAMP programs. As a result, nearly every servicer has been affected by HAMP. Initially, servicers struggled to implement a new, far-reaching program, and the government struggled to define the program’s contours and requirements. As the program matured, servicers have contended with increased regulatory scrutiny while the government has faced public and congressional criticism because it has failed to deliver the full scope of its promised improvements. All the while, litigation and government enforcement actions relating to HAMP have increased, signaling that issues surrounding HAMP compliance are not likely to end anytime soon.
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