Active Chapter 7 and Chapter 13 bankruptcies are no longer automatically declined.
If the borrower in active Chapter 7 or Chapter 13 bankruptcy (or attorney or bankruptcy trustee) requests, the servicer MUST consider the borrower under HAMP and can no longer decline borrower as a "proper exercise of discretion".
Permanent modfications are not denied merely because of Chapter 7 and Chapter 13 filings.
If the borrower has been approved on a trial loan modification and files a Chapter 7 or Chapter 13, the servicer MAY NOT deny the borrower for a permanent modification only because of filing bankruptcy.
Chapter 7 non-reaffimations on mortgages no longer automatically denied under HAMP.
If a delinquent borrower has a discharged Chapter 7 and chose not to reaffirm the first lien mortgage debt is still eligible under HAMP, with the following provision added to the permanent modification agreement: "I was discharged in a Chapter 7 bankruptcy proceeding subsequent to the execution of the Loan Documents. Based on this representation, Lender agrees that I will not have personal liability on the debt pursuant to this Agreement."