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Majority of GSE HAMP Permanent Modifications Remain Active

cutting-moneySlightly more than 419,000 permanent loan modifications completed by homeowners using the Department of Treasury's Home Affordable Modification Program (HAMP) on loans insured by Fannie Mae and Freddie Mac remained active as of the end of May 2015, according to the FHFA's May 2015 Foreclosure Prevention Report released this week.

That number represents about 60 percent of the 644,917 GSE HAMP trial modifications that transitioned into permanent modifications from the time the program began in 2009 up until the end of May 2015. According to FHFA, about 199,000 of the permanent GSE HAMP mods defaulted (31 percent), 36,335 were paid off (5.6 percent), and 227 were withdrawn.

In all, 1,081,330 GSE HAMP trial modifications have been started since the program began, according to FHFA. Of those approximately 1.08 million trials started, 79,662 of them were disqualified (7.3 percent), 351,057 of them were cancelled (32 percent), and 644,917 of them transitioned into permanent modifications (60 percent). According to FHFA, 5,694 HAMP trial mods on GSE-backed loans remain active as of the end of May 2015 (about half of one percent).

About 47 percent of the permanent modifications completed in May 2015 were extend-term only, a number that has been slowly ticking downward since February due to improved prices and a decline in HAMP-eligible population.

HAMP was launched in February 2009 by the Obama Administration under TARP. At the time, the Administration estimated the program would help 3 to 4 million struggling homeowners avoid foreclosure and save money with lower mortgage payments. HAMP was originally scheduled to expire at the end of 2012, but has been extended three times. The latest extension allows the program to continue until the end of 2016.

Fannie Mae and Freddie Mac have completed about 3.5 million foreclosure prevention solutions since the start of the FHFA's conservatorship began in September 2008 at the beginning of the financial crisis, according to the FHFA's May report. About 3 million of those have been home retention solutions, allowing the homeowners to stay in their homes. About 1.82 million of them have come in the form of permanent loan modifications, either through HAMP or proprietary modifications.

Click here to see the FHFA's complete report.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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