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A Foreclosure Tsunami Part 3

Posted by CM on September 22, 2009

Excerpts from Diane E. Thompson’s written testimony to the U.S. Senate, Click here for full testimony

HAMP Recommendations

  • Mandate affordable payments
  • Limit fees charged
  • Permit principal reductions
  • Needs more transparency
  • Foreclosures should be stopped while in HAMP review
  • An ombudsmen should be available for homeowner complaints

HAMP Violations

  • HAMP prohibits a waiver of legal rights.  Servicers are still seeking waivers or admission of default, both prohibited under HAMP guidelines.
  • All homeowners who request HAMP review are entitled to one even if you are not in default.
  • HAMP forbids any upfront payments as a precondition to review or trial modifications.
  • HAMP requires that no foreclosures be initiated and no foreclosure sales be completed during a HAMP review
  • Homeowners encounter barriers when negotiated a modification.
  • Servicer staff have no clue about HAMP

Suggested HAMP Guidelines Adjustments

  • Homeowners need principal reductions, not forbearance.
  • An involuntary drop in income should qualify you for a second HAMP review.
  • Those in bankruptcy should have better access to HAMP.
  • Requirement for second liens to be modified simultaneously as the first.
  • Federal law should require that mortgage servicers provide homeowners with contact information for a real person with the information and authority to answer questions and fully resolve issues related to loss mitigation activities for the loan. 
  • Transparency should provide information about the loan and its servicing history.


1.  Preserving Homeownership: Progress Needed to Prevent Foreclosures.  Written testimony of Diane E. Thompson, National Consumer Law Center and on behalf of National Association of Consumer Advocates.  Before the United States Senate Committee on Banking, Housing, and Urban Affairs.  7/16/09.
2. National Consumer Law Center:
3. National Association of Consumer Advocates:
4. U.S. Senate Banking, Housing, and Urban Affairs Committee:
5. Making Home Affordable:


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