TARP and HAMP Require That Foreclosure Be Suspended

by Jed Berliner, Western & Central Massachusetts Consumer Lawyer

August 7, 2009

A mortgage lender which received TARP funds, or which voluntarily signed up for President Obama’s HAMP program, must suspend a foreclosure action while a borrower’s mortgage modification application is pending. That’s good news.

HAMP is the modification program of the Home Affordable Plan.  (HARP is the refinance program.)  Lenders can sign up to participate.  Banks which received TARP (Troubled Asset Relief Program) automatically “volunteered” for the HAMP program.  Here are the lists of TARP recipients (money paid under Capital Purchase Contracts) and HAMP participants.

The HAMP contract with the United States Treasury requires that all Treasury guidelines be followed, including this one which states that “Any foreclosure action will be temporarily suspended during the trial period, or while borrowers are considered for alternative foreclosure prevention options.”  See Page 3 of Home Affordable Modification Program Guidelines, dated March 4, 2009.

Make sure you’ve applied for a modification.  Yes, the lenders will lose the applications or just not return your calls.  That won’t matter, so long as you’ve sent in an application.

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Jed Berliner practices exclusively in consumer bankruptcy, foreclosure defense, and related consumer protection litigation such as credit card defenses and suing debt collectors. He established his Springfield, MA practice in 1988. Attorney Berliner is a regular and active contributor to the Bankruptcy Law Network, the Bankruptcy Roundtable, and the National Association of Consumer Bankruptcy Attorneys, three specialized consumer bankruptcy forums on the Internet, and is an informal mentor to regional practitioners. He is recognized by his peers as an expert in consumer bankruptcy issues. He thoroughly enjoys being rated "excellent" in his client surveys.

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Last modified: October 22, 2012