Treasury Grants Another $4.7bn to HAMP Servicers

The US Treasury Department made another round of adjustments the total capped incentives to servicers participating in the Home Affordable Modification Program (HAMP). Treasury granted a total $4.7bn of incentive funds from the previously downwardly adjusted cap amount.

The recent adjustments, made in late September, bring the total capped amount to to $27bn, according to the Troubled Asset Relief Program’s (TARP) latest transaction report. The latest round of adjustments comes after several adjustments in June and July, which took a total $1.13bn in cuts off the original amount allotted.

Announced in March 2009 by the Obama Administration, HAMP allocates capped incentives to servicers for the modification of loans on the verge of foreclosure. The Treasury adjusts the caps based on the performance of the 64 servicers, including Albany, NY-based SEFCU, which received $440,000 in capped incentives when it joined in late September.

According to the latest progress report released by the Treasury in September, servicers offered 570,000 mortgage modifications and started 360,000 trial modifications.

GMAC Mortgage received the biggest increase in its cap allocation of $2.5bn to a total of $3.5bn. GMAC started trial modifications on 26% of its eligible portfolio, the third highest of the participating servicers, according to the progress report.

CitiMortgage received a $1bn increase in its cap to $2.4bn in total capped incentives — after receiving a $991.58m cut in June. CitiMortgage started trial modifications on 23% of its eligible portfolio, the fifth highest.

National City Bank received a $315m increase in its cap, raising its total to $610m. National City Bank started trial modifications on 3% of its eligible portfolio, ranking 18th of the participating servicers.

Countrywide Home Loans Servicing received a cut of $717m to its capped incentives after a $3.3bn increase in June. Its total cap allotment dropped to $4.4bn. Bank of America (BA: 51.70 +0.52%), which includes Countrywide’s servicing performance, started trial modifications on 7% of its eligible portfolio, the 12th highest. Bank of America received an increase of $162m to its total cap, increasing to $967m.

Saxon Mortgage, the top performer in HAMP with trial modifications started on 39% of its eligible portfolio received a $254m boost, raising its total capped figure to $886m.

Write to Jon Prior.