Treasury, HUD Release November Housing Scorecard – Calls Out JP Morgan

by devteam December 8th, 2011 | Share

The Departments of Treasury and Housingrnand Urban Development have released their joint November 2011 HousingrnScorecard.  The report is essentially arnsummary of data on housing and housing finance released by public and privaternsources over the previous month and/or quarter. rnMost of the data such as new and existing home sales, permits and starts,rnmortgage originations, and various house price evaluations have been previouslyrncovered by MND.  </p

The scorecard incorporates by referencernthe monthly report of the Making Home Affordable Program (MHA) through the endrnof October.  This includes information onrnthe universe of MHA programs including the Home Affordable Modification Programrn(HAMP), HOPE Now, and Second Lien Modifications.  </p

During the month of October HAMPrnservicers initiated 21,445 new trial modifications and converted 26,102 trialrnmodifications to current status.  Sincernthe program was started in April, 2009 there have been 1,735,457 trials startedrnand 883,076 permanent modifications. rnSlightly more than 85,000 borrowers remain in active trials.  The time a borrower spends in trial statusrncontinues to improve and now stands at 3.5 months.   Overrnthe course of the program 147,600 permanent modifications have been canceledrnand 735,464 modifications remain in force.</p


Since October 2010 servicers have beenrnrequired to evaluate all loans with a loan to value ratio (LTV) greater thanrn115 for their appropriateness for inclusion in the Principal ReductionrnAlternative (PRA) program.  Whilernservicers are not required to reduce the principal of any given loan, they mustrnevaluate each loan when assessing it for HAMP. rnServicers are paid an incentive for every dollar of principal forgivenrnon a sliding fee scale and depending on the degree to which the unmodifiedrnbalance of the loan is greater than the market value of the home.  Loans belonging to either of the two GSEs arernspecifically exempted from PRA.</p

To date there have been 53,323 trial PRArnmodifications started and 33,376 permanent modifications including it.  The median principal amount reduced on a loanrnin an active permanent modification is $65,172 or 31.3 percent and these loansrndropped from a median LTV of 158 percent to a post modification LTV of 115rnpercent. </p

The ten largest servicers account for 97rnpercent of the modifications started with PRA and the top three servicers (Bankrnof American, Wells Fargo, and JP Morgan Chase) account for 68 percent.  Three states (California, Florida andrnIllinois) are home to 42 percent of all HAMP modifications and 53 percent ofrnthose with PRA.  </p

The Second Lien Modification Program</b(2MP) has now initiated 50,434 second lien modifications, 8,634 of whichrnresulted in full extinguishment of the lien and 1,569 in partialrnextinguishments.  There are 40,878 secondrnliens in modification including the partially extinguished liens.</p

The Home Affordable ForeclosurernAlternatives Program (HAFA) assists borrowers who wish to surrender their homesrnshort of foreclosure, usually through a short sale.  To date 34,605 homeowners have entered thernprogram and 20,701 have completed HAFA transactions; 591 through a deed in lieurnof foreclosure and the remainder through short sales. </p


HAMP is reporting that during the thirdrnquarter only one servicer, JP Morgan Chase Bank was found to be in need ofrnsubstantial improvement following the MHA Servicer Assessments.  As has been the case in each of the periodsrnsince the assessment program began, the Treasury Department will withhold allrnservicer incentives owed to JP Morgan Chase. rn</p

Seven servicers were found to needrnmoderate improvement but only one, Bank of America, will have servicerrnincentives withheld until it makes additional improvements.  The remainder of the servicers needingrnmoderate improvements has been put on notice that they may have incentivesrnwithheld in the future unless identified improvements are made.   </p

Treasury Calls Out JPMorgan in Servicer Assessments
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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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