Opinion ID: 624826
Heading Depth: 2
Heading Rank: 2

Heading: The Trial Period Plan

Text: Where a borrower qualified for a HAMP loan modification, the modification process itself consisted of two stages. After determining a borrower was eligible, the servicer implemented a Trial Period Plan (TPP) under the new loan repayment terms it formulated using the waterfall method. The trial period under the TPP lasted three or more months, during which time the lender must service the mortgage loan ... in the same manner as it would service a loan in forbearance. Supplemental Directive 09-01. After the trial period, if the borrower complied with all terms of the TPP Agreementincluding making all required payments and providing all required documentationand if the borrower's representations remained true and correct, the servicer had to offer a permanent modification. See Supplemental Directive 09-01 (If the borrower complies with the terms and conditions of the Trial Period Plan, the loan modification will become effective on the first day of the month following the trial period....). Treasury modified its directives on the timing of the verification process in a way that affects this case. Under the original guidelines that were in effect when Wigod applied for a modification, a servicer could initiate a TPP based on a borrower's undocumented representations about her finances. See Supplemental Directive 09-01 (Servicers may use recent verbal [sic] financial information to prepare and offer a Trial Period Plan. Servicers are not required to verify financial information prior to the effective date of the trial period.). Those guidelines were part of a decision to roll out HAMP very quickly. [2]