The Obama administration has an odd way of assessing the results of its $50bn Home Affordable Modification Program, or HAMP. When the program was announced a year ago, the administration said it would “offer reduced monthly payments for up to three million to four million at-risk homeowners,” people in danger of losing their homes to foreclosure. That phrase, though qualified by the words “up to,” set high expectations. Given the complexities of the program and the bureaucratic inertia of the big banks that are struggling to carry it out, it isn’t very surprising that the results so far have failed to meet those expectations. As of Feb. 28, 168,703 households had “permanent” loan modifications under the program, while 835,194 were in the trial stage. Borrowers accepted for the program are expected to make three monthly payments before their modifications can be deemed permanent, though in many cases it’s taking far longer for the banks to decide whether to proceed with a long-term mod. Many of the people in trial mods will crash out of the program. Some are unable or unwilling to document their financial situations; others turn out not to qualify once banks take a closer look at their finances. Some fail to keep making the reduced payments.
An odd way to measure the success of mortgage mods
Most Popular Articles
Latest Articles
Freddie Mac’s proposed home equity product could unlock $850B in originations
Bank of America strategists also say that the absence of a robust securitization market could limit the potential of these second-lien loans
-
Brian Icenhower on impact of commission lawsuits and low volume
-
Opinion: If you’re chasing volume, you’re chasing the wrong carrot
-
Why are existing home prices rising when sales are still so low?
-
FundingShield’s Ike Suri on the limits of AI in fighting fraud
-
Former academy resumes role as Funding Longevity Task Force