[Update 2: Removes reference to electronic dispute for separate article post] Bank of America (BAC) pushed its total number of permanent modifications under the Home Affordable Modification Program (HAMP) to roughly 70,000 in May, up from 56,400 in April. BofA reported more than 630,000 modifications through all of its programs since January 2008. The Treasury Department launched HAMP in March 2009 to provide incentives to servicers for the modification of loans on the verge of foreclosure. Borrowers must make three monthly payments under a trial modification and provide all financial documents to the servicer before it becomes permanent. In April, servicers reported more than 300,000 permanent modifications under HAMP. Earlier in June, BofA began reducing principal for some qualifying underwater borrowers as part of the modification process. “Bank of America continued to make significant progress in converting HAMP trial modifications to completed modifications last month,” said Rebecca Mairone, default servicing executive for Bank of America Home Loans. Write to Jon Prior. The author holds no relevant investments.
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It looks like borrowers who don’t fit neatly into Fannie Mae and Freddie Mac’s lending criteria could soon be running out of options if they want to buy a house. Over the last week, many (if not all) of the biggest lenders specializing in lending to borrowers outside the QM lending box paused their activities due to uncertainty in the market. And now it appears that FHA lending as we know it is disappearing from the market too.
Like many other lenders and companies, Impac is having to navigate the dislocation associated with the interest rate and credit risk mortgage markets. In light of recent events, Impac announced a two week temporary suspension of all lending activity effective March 30.