The Obama Administration’s Home Affordable Refinance Program, like so many other programs before it, has not delivered as well as hoped. One of the hurdles borrowers and lenders are facing is the documentation required to qualify for the program. The Fed recently announced it was going to reduce those documentation requirements in a bid to speed the program along. We get this from a Washington Post article on the topic:
Facing mounting criticism about the effectiveness of the government’s foreclosure-prevention efforts, the Obama administration announced Thursday that it will tighten the documentation requirements for borrowers applying for its marquee mortgage relief program.
Starting June 1, borrowers must prove they qualify for the mortgage help upfront, providing two pay stubs and other paperwork before their payments can be lowered. The change attempts to prevent a repeat of the current backlog of borrowers who received mortgage relief after a phone conversation with their lender but did not satisfy the government’s documentation requirements within three months.
…
While lenders blamed borrowers for not submitting their documentation on time, homeowners and housing counselors have complained that banks often lost the paperwork. In some cases, lenders have been slow to complete the loan modification even after the borrower met all the requirements, they have said. Government officials said the new paperwork requirements will be easier to understand and less onerous for borrowers.