Total Number of HAMP Permanent Modifications Passes 340,000
Servicers participating in the Home Affordable Modification Program (HAMP) conducted 340,459 permanent modifications through May 2010 since the program launched in March 2009, up from 299,092 through April, according to the Treasury Department. The Treasury launched HAMP to provide incentives to servicers for the modification of mortgages on the verge of foreclosure. In order to receive a permanent modification, borrowers must make three monthly payments during the trial period and submit all documentation. In May, servicers converted 47,724 trial modifications into permanent status, a 30.1% decrease from 68,291 conducted in April. In May, there were 6,357 permanent modifications canceled, include 124 mortgages that borrowers paid off. The Obama Administration set an early goal for 3m to 4m borrowers to receive aid under HAMP before the program expires at the end of 2012. After 14 months, servicers have reached over 10% of that mark. Servicers have offered 1.5m three-month trial modifications through May and have stared 1.2m of them. There are currently 467,672 active trial modifications. Servicers reported 30,099 new trials since April. Borrowers receiving a permanent modification received an average 36% discount on their monthly payments for an average of more than $500 a month. According to the Treasury, borrowers with a permanent modification are guaranteed lower payments for five years and fixed terms at current market rates for the remaining life of the loan. HomeEq, the former servicing arm of Barclays Capital and recently bought by Ocwen Financial Corp. (OCN), converted 86% of its trial modifications into permanent status, the highest of any servicer. It has converted 3,054 permanent modifications and holds 16,233 HAMP-eligible loans. Ocwen converted 83% of its trials into permanent status, totaling 13,384 permanent modifications. Carrington Mortgage Services had the third highest conversion rate at 79%, totaling 1,914 permanent modifications. The big-four banks all had similar conversion rate numbers. Wells Fargo (WFC) led them with 26% converted to permanent status, totaling 40,759 permanent modifications. JPMorgan Chase (JPM) converted 25% for a total of 47,467 permanent modifications. CitiMortgage, the servicing arm of Citigroup (C) converted 25% as well, totaling 34,675 permanent modifications. Bank of America (BAC) holds the highest amount of permanent modifications of any participating servicer, at 62,969, a 24% conversion rate. BofA holds more than 478,000 HAMP-eligible loans. According to BofA, it conducted nearly 70,000 permanent modifications as of May, but because of a reporting delay, an additional 7,000 will be on the June HAMP report. Write to Jon Prior. The author holds no relevant investments.