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What to Do When Your Servicer Refuses to Accept or Process a HAMP Application Because You Are In An Active Bankruptcy Case

1. Remind the servicer that a pending bankruptcy is not a basis for denial. See HAMP Sup. Dir. 10-02, p. 7.

  • A debtor in an active chapter 7 or chapter 13 bankruptcy case must be considered for HAMP if the debtor submits a request to the servicer.
  • A debtor in a trial period plan who later files bankruptcy may not be denied a permanent HAMP on the basis of the bankruptcy filing.

2. Inform your servicer's bankruptcy counsel of the obligation to work with you to get court or trustee approval of the loan modification, if needed. Sup. Dir. 10-02, p. 7-8.

  • Trial period may be extended two months (resulting in total five-month trial period) to get court approval.

3. Request your bankruptcy lawyer to file an objection and seek sanctions if the servicer takes action in a chapter 13 case because you are paying the trial plan payment rather than the regular, non-modified mortgage payment. See HAMP Sup. Dir. 10-02, p. 8.

  • Servicer must not object to plan confirmation, move for dismissal, or move for relief from the automatic stay on this basis.

4. Request that Trial Period Plan be waived if you have already made sufficient payments. See HAMP Sup. Dir. 10-02, p. 8.

  • Servicer may put you in a permanent mod without completing the trial period plan if you have made all post-petition mortgage payments and at least three of them are equal to or greater than the proposed modified payment.
  • Waiver of trial plan must be permitted under applicable investor guidelines.

5. Request that servicer use schedules and tax returns filed in chapter 7 or 13 case in lieu of RMA and Form 4506T-EZ. See HAMP Sup. Dir. 10-02, p. 8.

  • Servicer may accept these documents if they are not more than 90 days old.
  • You must still provide executed Hardship Affidavit (or RMA).

6. Call Howard Law, P.C. at 1-800-872-5925 for assistance with your loan modification today. We have helped many homeowners who have been previously rejected by their lenders for a HAMP or other loan modification.

- July/August 2010, NCLC Reports Bankruptcy and Foreclosures Edition