MBA Wants a Forbearance Option on HAMP

The Mortgage Bankers Association wants the White House to tone down expectations for the Home Affordable Modification Program and create a forbearance option for borrowers who become unemployed or suffer a loss of income. Delinquent borrowers are facing a tough economic situation and have a difficult time making it through the HAMP payment trials to qualify for a permanent modification, said MBA chairman Robert Story. If they become unemployed and cannot make their mortgage payments, they "can't qualify for HAMP," Mr. Story said. He noted that forbearance or deferred payments should be considered. Once the borrower gets a job, the servicer can "move them" into a HAMP modification, MBA president John Courson said in a press briefing Tuesday. MBA also wants the Obama administration to amend HAMP so servicers can offer borrowers an option to pay only interest on the mortgage and defer principal payments. Offering an interest-only option would help get the "payments down to a level the borrower can afford," said Mr. Courson.