1/29/2010 Los Angeles Times: New rule affects homeowners in foreclosure avoidance program

"Those seeking to ease their mortgage terms must now document their finances before a trial modification will be granted, the Obama administration says. Loan servicers must adopt the policy by June 1..."

"The new procedure, to be adopted by servicers by June 1, would require three documents upfront: a formal application including a description of the hardship created by the mortgage; proof of income, which would mean at least two pay stubs or the most recent profit and loss statement for self-employed borrowers; and a form authorizing the Internal Revenue Service to release tax data to the servicer..."

"Under the plan, servicers will be required to respond within 10 days to an initial request for a modification. Once documents are provided, the servicer will have one month to tell borrowers whether they qualify for a trial modification. If a borrower makes three payments at the modified rate, the modification will automatically be made permanent."