Treasury, Servicers to Talk HAMP 'Permanence'
[Update 1 adds Treasury's announcement of modification conversion drive.] Mortgage servicers participating in the Home Affordable Modification Program (HAMP) are expected to hear from the Treasury Department on the progress of HAMP so far. Michael Barr, the Treasury’s assistant secretary, over the weekend told media outlets HAMP servicers can expect more pressure from the Obama Administration to bring modifications through the three-month trial phase and into permanency. The Treasury on Monday announced the mortgage modification conversion drive, which aims to implement new outreach tools, borrower resources and servicer accountability to facilitate the conversion of trials into permanency. A source close to the Administration's plans tells HousingWire the Treasury will conduct a call with servicers Monday afternoon to discuss progress on converting trial modifications to permanent ones. HAMP requires a successful three-month trial period before a modification is considered to be in "permanent" status. The trials, meant to eliminate early defaults under modification plans, make determining the ratio of permanency difficult. Ocwen Financial Corp. (OCN) recently told HousingWire that it has converted 66% of its HAMP trials into permanency, which would equal a little more than 5,000 trial modifications. A spokesperson for the Treasury told HousingWire that the Treasury will begin reporting on permanent modifications in December. The Congressional Oversight Panel (COP), which reviews and reports on actions taken by the Treasury, previously expressed concern about the limitations in both scope and scale of the Making Home Affordable (MHA) program and questioned the Treasury’s approach to permanently modifying mortgages. MHA’s centerpiece, HAMP, allocates capped incentives to servicers for the modification of distressed loans. The Treasury estimates it will spend $42.5bn of the $50bn in funding from the Troubled Asset Relief Program (TARP) for HAMP, an amount that will support nearly 2.6m modifications, according to the COP’s October report. Write to Diana Golobay.