The November Housing Scorecard issued jointly by the Departments of Housing and Urban Development (HUD) and Treasury is notable mainly for its data on the apparent winding down of the Making Home Affordable Modification Program (HAMP). All metrics for the program were lower during the latest period (October 10) than in the period ending in September.
The number of borrowers entering trial modifications dropped to 26,100 from 35,300. An average of 23,000 new trials began each month in the second half of 2010 and a total of 1.4 million trials have started since the program began in April 2009. 719,487 or 51 percent of the trials have been canceled.
Moving borrowers from successful completion of the required three-month trial period to permanent modification status has been a persistent problem and program administrators have revamped project guidelines and stepped up monitoring several times in an attempt to speed up the process. At present there are still 69,000 borrowers who remain in trial status after six months or more compared to the 266,000 borrowers who had been lingering in trials at the beginning of the second quarter. The pace of conversions picked up after the government intensified its role and an average of 37,000 conversions a month or 222,000 out of the total of 519,600 conversions have occurred in the last six months. Much of that improvement, however, occurred in the first two months of that period and the pace has again slowed. During the most recent reporting period, conversions dropped to 24,000 compared to 27,800 the previous month.
Active permanent modifications now total 483,342; 36,306 permanent modifications have been canceled since the program began.
HAMP had an original goal of helping three to four million homeowners but is apparently destined to fall far below that goal although program officials maintain that over 40 percent of borrowers who fell out of the HAMP program received other modification assistance from servicers.
Alan Zibel reporting on a House subcommittee hearing for Dow Jones Newswires said that Rep. Maxine Waters (D-Calif.) urged the government to be more aggressive in penalizing lenders who have not done a good enough job of modifying loans. "There have been no monetary penalties and no sanctions," she said. But Phyllis Caldwell, head of the Treasury's homeownership preservation office, told Zibel that the government does not have the ability to fine mortgage servicers.
Modifications through HOPE Now increased slightly, from 115,800 in the previous period to 119,600, but other federal foreclosure prevention programs also appear to be slowing. FHA loss mitigation interventions dropped from 56,400 to 31,900 and the number of borrowers counseled though various federal programs during the third quarter, 713,500, decreased considerably from the second quarter total of 839,400.
Acting Assistant Treasury Secretary Timothy Massad said, "The recent reports of problems in the foreclosure process underscore the importance of helping responsible homeowners avoid the pain of foreclosure. As we implement additional program enhancements to reach more homeowners, we continue to stress to mortgage servicers the importance of making every effort to enroll eligible homeowners in HAMP and provide meaningful alternatives to avoidable foreclosures."
The Monthly Scorecard also noted that an additional 1 million families refinanced their mortgages in the last quarter bringing the total since April 2009 to 8.3 million. The lower rates they achieved are estimated to have resulted in $15.2 billion in annual borrower savings.
