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News:  New rule to speed up foreclosure rescues

The latest foreclosure rescue attempt is a new rule that allows mortgage servicers to waive the escrow requirements for first-lien home equity lines of credit (HELOC) and home equity loans during a Home Affordable Modification Program (HAMP) trial-period, according to HAMP administrators. 

The waiver applies to all servicers that “due to system and technology limitations” are not able to collect escrow payments on home equity loans or credit lines.  During the HAMP trial periods, the borrower must pay all escrow obligations, such as tax and insurance bills.

Trial period payments only apply to principal and interest.  However, once the trial modification is converted to permanent status, the loan must move to a servicing system that can accept escrow payments for home equity loans or credit lines, administrators said. 

The escrow-relate waiver is the second such rule to take effect this weeks intended to speed up HAMP processing.  “By eliminating the need to convert these   loans during the trial period to a new servicing system, the loan can begin the trial modification process faster,” said a statement by HAMP administrators to servicers.

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Tags: loan modifications, mortgage news, st louis foreclosures, st louis refinance, st louis refinancing

This entry was posted on Thursday, December 24th, 2009 at 7:16 pm and is filed under mortgage news. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.