The administration released new data on the Home Affordable Modification Program (HAMP) Wednesday. Just over 33,000 homeowners received a permanent HAMP mod in August.
[IMAGE] That's 27 percent below the number of permanent conversions the month before. So far, about 468,000 permanent modifications have been granted to distressed homeowners under the federal program.
The ""monthly report"":http://portal.hud.gov/portal/page/portal/HUD/documents/september_scorecard.pdf compiled by Treasury and HUD says homeowners in permanent HAMP modifications have seen their mortgage payments drop by a median of 36 percent, or more than $500 per month. Borrowers who've received a permanent loan mod saw their first-lien housing expenses fall from nearly 45 percent of their monthly household income to 31 percent.
Last month, 26,628 new trial modifications were added to the HAMP roster. There are currently 202,521 active HAMP trials. Treasury says the backlog of aged trial modifications has dropped to fewer than 95,000.
Federal officials have been pushing servicers to make decisions for borrowers who've completed the trial phase Ã¢â‚¬"[COLUMN_BREAK]
either convert them to permanent status or drop them from the program. According to Treasury, the most common causes of cancellations include insufficient documentation, missed trial payments, or primary housing expense that is already less than 31 percent of the borrower's household income.
Servicers reported that more than half of homeowners in canceled trials have received alternative modifications or become current. According to the data, fewer than 15 percent of borrowers who've been canceled from the program are moving toward foreclosure.
Verified documentation and income has been required to initiate a trial modification since June. Treasury says because of this change in the program requirements, the permanent conversion rate is expected to rise.
In announcing the August results, HUD Assistant Secretary Raphael Bostic said, ""We're certainly not going to stop fighting to turn things around. That's why we are focusing on successfully implementing the programs we have put in place, such as additional assistance on refinancing and helping unemployed homeowners stay in their homes, and will continue to monitor the market closely in case more is needed.""
The latest report included the quarterly results of compliance reviews conducted by the government-controlled ""Freddie Mac"":http://www.freddiemac.com. The GSE's ""second look"" reviews found that fewer than 5 percent of loans sampled from large servicers were evaluated incorrectly by the servicer.
Where applicable, Treasury says servicers are required to forestall foreclosure sales and reevaluate these homeowners under HAMP guidelines. Servicers are also required to suspend foreclosure sales on loans where results are under review.