Released: January 29, 2010

Administration tightens requirements for mortgage relief

Source: Renae Merle, Washington Post (Free Registration)

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.

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