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Mortgage servicers have significantly stepped up efforts to convert trial modifications to permanent status under the administration's Home Affordable Modification Program (HAMP), nearly doubling the number in just one[IMAGE]month's time. The U.S. Treasury released its ""January report card"":http://www.financialstability.gov/docs/press/January%20Report%20FINAL%2002%2016%2010.pdf Wednesday and it showed that 116,297 homeowners were in permanent modifications as of the end of last month.
Another 76,482 have been extended offers for a permanent restructuring, needing only the borrower's signature to complete the conversion. The Treasury said the data ""marked record progress."" January was the first time that the pace of permanent conversions exceeded that of new trials â€" a manifestation of the intense pressure placed on servicers by the administration over the last few months to boost their permanent numbers.
Permanent mods jumped 75 percent from December to January, while new trials rose by about 9 percent. With nearly 1.3 million trial modification offers extended to struggling homeowners since the program began nearly a year ago, Treasury officials say HAMP is on pace to meet its goal of helping three to four million borrowers hang on to their homes by the end of 2012.
The Treasury estimates there are 5.6 million homeowners who are currently 60 days behind on their payments. Of these, about 1.7 million are eligible for assistance through HAMP, according to the Treasury’s calculations. But of course, the number of HAMP-eligible homeowners is expected to grow over the next three years, officials said, as more delinquencies come to light.
[COLUMN_BREAK]The Treasury’s report shows that 60,476 trial modifications have been canceled, while 1,005 permanent modifications have been terminated, presumably because the borrower failed to stay current on the new payments.
The median monthly payment reduction for borrowers enrolled in the program is $522, representing an aggregate savings of more than $2.2 billion, the Treasury said. According to data provided by the administration, 100 percent of the permanent modifications have reduced the interest rate, 42 percent have extended the loan term, and 27 percent have included principal forbearance.
“With nearly one million homeowners paying less each month and the number of permanent modifications steadily rising, HAMP is doing the job it was designed to do,"" said Phyllis Caldwell, chief of Treasury’s Homeownership Preservation Office.
As part of its efforts to goad servicers into picking up the pace, the Treasury is publishing comparisons of their performance each month. As of the end of January, CitiMortgage and GMAC Mortgage led the pack, each having provided modifications, including both trial and permanent, to 50 percent of their eligible borrowers. Citi has successfully converted 10,929 modifications to permanent status. GMAC has done so for 11,494 of its home loans. Saxon Mortgage Servicing wasn’t far behind, with 48 percent of its eligible borrowers in a trial or permanent modification. Saxon has completed 5,312 permanent mods.
JPMorgan Chase and Wells Fargo were both at 38 percent. JPMorgan has made 11,581 modifications permanent, but has 17,959 pending. Wells Fargo has completed the most permanent conversions, with 17,652. Bank of America has put 22 percent of its eligible borrowers into modifications and made 12,761 permanent.
Mortgage modifications are just one piece of the administration's broader housing stabilization plan. Under the government’s direction, four million homeowners have also refinanced their mortgages into more affordable loans within the past year. Other initiatives include funding for state and local housing agencies, tax credits for homebuyers, and neighborhood stabilization and community development programs.
