Basically whatever organization wrote this, didn't write it to benefit the homeowner.
It is sickeningly vague, the creation of the escrow account is done basically without any thought of how this might be used to harm the borrower, or maybe it was written to harm the borrower..
The ridiculously low incentives offered to the banks, the nightmarish documentation procedure.. I mean from start to finish it is a SCAM, and yet it is a contradiction in words, set up to help the homeowner, but keep reading and we will tell you how we will used this to harm him.
Supplemental Directive 09-01 April 6, 2009
On February 18, 2009, President Obama announced the Homeowner Affordability and Stability Plan to help up to 7 to 9 million families restructure or refinance their mortgages to avoid foreclosure. As part of this plan, the Treasury Department (Treasury) announced a national modification program aimed at helping 3 to 4 million at-risk homeowners – both those who are in default and those who are at imminent risk of default – by reducing monthly payments to sustainable levels. On March 4, 2009, the Treasury issued uniform guidance for loan modifications across the mortgage industry. This Supplemental Directive provides additional guidance to servicers for adoption and implementation of the Home Affordable Modification program (HAMP) for mortgage loans that are not owned or guaranteed by Fannie Mae or Freddie Mac (Non-GSE Mortgages).
Introduction of the Home Affordable Modification Program