HAMP Reaches Half-Million Borrowers. Results Depend on Redefaults
The U.S. Departments of the Treasury andrnHousing and Urban Development are celebrating the early completion of more thanrn500,000 trial loan modifications under their Making Home Affordable Programrn(HAMP.)
Under the program, servicers are paid uprnto $4,000 over three years for successful loan modifications.
The half-million loan goal was set earlyrnin the life of the program which seeks to help delinquent homeowners stay inrntheir homes. The benchmark was reachedrnnearly a month ahead of the original November 1 target date and in spite of arnslow start earlier this year.
The program, which was first announcedrnin February, was in fact pretty much a mess by the end of May when only aboutrn50,000 homeowners had been helped and thousands were complaining about the lackrnof organization and sensitivity of the program.
During a meeting in June the TreasuryrnDepartment was apparently able to appropriately motivate the servicers to addrnadditional staff, step up training, and implement more effective procedures andrnthe numbers have been increasing exponentially ever since.
Treasury and HUD officials met withrnservicers again on Thursday afternoon.
In addition to announcing that the 500,000 modification goal had been met,rnthe two department issued a report on their achievements up to the end ofrnSeptember. 487,081 trial modifications had begun, nearly 2.5 million borrowersrnhad been contacted and asked for financial information, and 758,000 trial planrnoffers had been extended by servicers.
By the end of September 63 servicers were participating in HAMP. This is in addition to a much larger numberrnof Freddie Mac and Fannie Mae servicers which are automatically included in thernprogram. The voluntarily participatingrnservicers are responsible for over 85% of all 60 day or more delinquent mortgagesrnin the country.
While a few servicers have not yet modified any loans, several of the largestrnones have already put 25 to 47 percent of their delinquent borrowers into thernrequired trial modification period. Read the report HERE
Mortgage News Daily Managing Editor Adam Quinones adds perspective, “While it's exciting to see servicers participating in the administration's efforts to slow foreclosures and stabilize housing, we cannot gauge the success of the program until previously delinquent borrowers prove they can stay current on their restructured loan terms. Regardless of lower payments and extended loan terms, the simple truth is many borrowers are still underwater on their mortgage and therefore more likely to re-default on their loan”.
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