Tag Archives: HAMP

The government's key foreclosure prevention program has put 504,648 distressed homeowners into permanently modified loans since its launch in March 2009. Treasury released new numbers for the Home Affordable Modification Program (HAMP) Wednesday, and in addition to crossing the 500K threshold, the data show that servicers stepped up their use of the program. Permanent modifications in November rose 26 percent compared to October, and 20 percent more trial mods were started.

For every home loan held by Fannie Mae and Freddie Mac that was modified during the third quarter, 2.3 loans were foreclosed on during the same period. The GSEs initiated foreclosure on 339,000 home mortgages during the July to September timeframe. Loan modifications completed in the quarter totaled 146,500, with the majority of those completed through non-HAMP programs. The two companies approved 29,500 short sales during the third quarter.

The Federal Trade Commission (FTC) will enact a ban on advance fees charged for loan modification and mortgage assistance rescue services starting January 31, to prevent providers of such services from collecting upfront fees from homeowners without successfully securing a loan modification. The new rule, however, exempts fees charged in advance for loan modification products, such as software systems that produce modification documentation like the technology offered by loss mitigation software provider the Loan Post, Inc.

The Obama administration's signature foreclosure prevention program will help only 700,000 Americans save their homes, according to a scathing report released Tuesday by the Congressional Oversight Panel. The group's assessment falls far short of the 3 to 4 million homeowners that the president pledged would receive more sustainable mortgage loans when the Home Affordable Modification Program (HAMP) was launched in March of last year, and is well below the 8 to 13 million foreclosures expected by 2012.

With property values still tumbling, it's no surprise that nearly a quarter of the nation's mortgage borrowers owe more than their home is worth. Industry studies support the consensus that the farther a borrower sinks into negative equity, the more likely they are to throw in the towel. The severity of this catch-22 is now top-of-mind for government officials. The administration is reportedly pressuring Fannie Mae and Freddie Mac to make principal write-downs a key component of their foreclosure prevention efforts.

New data from HOPE NOW shows that the industry completed more than 1.5 million loan modifications for at-risk homeowners from January through October of this year. That translates to an average of 154,000 homeowners per month who have been able to remain in their homes with an affordable loan modification solution. The report makes it clear, though, that there's far more work to be done. HOPE NOW says there are currently 3.4 million homeowners 60 or more days behind on their mortgage payments.

Although economists say the country would be in far worse shape without it, the federal government's $700 billion bailout package approved by Congress in October 2008 was widely criticized at the time for the cost taxpayers would be forced to bear. That projected price tag, though, has been steadily declining as the financial sector has found firmer footing. The Congressional Budget Office now puts the cost of the Troubled Asset Relief Program (TARP) at just over 3 percent of the $700 billion initially allocated - $25 billion.

The law firm of Harwood Feffer, LLP has filed a class action lawsuit against Wells Fargo Bank and its servicer, America's Servicing Company (ASC). The suit alleges that ASC induced borrowers to default on their mortgages by telling them they would not be eligible for a loan modification if they were current on payments. Harwood Feffer claims ASC was looking to boost its revenue by assessing additional penalties and fees and collecting interest on the nonperforming loans it services.

Maine attorney general Janet T. Mills announced last week that negotiations with GMAC Mortgage LLC and Bank of America had resulted in a temporary halt in foreclosure sales in the state. The two lenders have agreed not to proceed to judgments on any pending matters in Maine until they have completed an internal review of their foreclosure procedures and discussed the procedures with the attorney general.

Fewer than 500,000 homeowners have received permanent assistance through the Home Affordable Modification Program (HAMP) and are still current on their new payments. During the month of October, only 23,750 permanent modifications were granted. Many have called HAMP's results disappointing, but administration officials assert that the full spectrum of housing policies have helped bring stability to a very challenging housing market.