If a servicer tells the counselor that a loan cannot be modified because the eligibility requirements were not met, or the investor is not participating in HAMP, what should the counselor do?
If modification under the plan is not an option because the borrower does not meet the eligibility criteria, or because the investor is not participating in HAMP, the servicer is required to provide written notice of the reason for the denial to the borrower. Beginning on March 1, 2010, servicers must adhere to specific time lines and formats for providing this notice as described in Supplemental Directive 09-08, Borrower Notices. The counselor should first review the written notice provided by the servicer to determine if the servicer’s decision was in compliance with HAMP program rules. If the counselor does not believe that the servicer’s decision was made in compliance with HAMP guidelines, the counselor should follow the escalation process described in Question 8 above. If the servicer’s decision is appropriate, the counselor should discuss other loss mitigation options with the borrower, including loan modification programs offered by the servicer, opportunities to refinance, or
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