HAMP Results Continue to Slip

""Treasury"":http://www.treasury.gov released a new progress report on its Home Affordable Modification Program (HAMP) Wednesday. The number of modifications granted continues to slip, but each month's results are chipping away at the pool of eligible borrowers who fit the HAMP criteria.
[IMAGE] Fewer than 26,000 borrowers were placed into permanent modifications during the month of August. It marks the third consecutive month the number of permanent mods has declined. Just over 26,500 trial plans were started during the month.

At the same time, ""Treasury's report"":http://www.treasury.gov/initiatives/financial-stability/results/MHA-Reports/Documents/August%202011%20MHA%20Report%20FINAL.PDF shows that the number of borrowers currently eligible for HAMP has dropped to just 992,968.

Currently, there are 690,969 permanent HAMP mods and 105,860 HAMP trials in ""active"" status.

Treasury’s report came out just one day before a House Financial Services subcommittee is scheduled to hold a hearing on the administration’s response to the housing crisis, and one of the most outspoken critics of the government’s foreclosure prevention programs is heading back to Capitol Hill to address the subcommittee.

Neil Barofsky, who served as Special Inspector General of the Troubled Asset Relief Program (SIGTARP) from December 2008 to February 2011, indicated ""in a tweet Wednesday"":http://twitter.com/#!/neilbarofsky that his testimony will focus on HAMP and “foreclosure crisis questions not yet learned.”

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In ""an op-ed piece"":http://www.huffingtonpost.com/neil-barofsky/foreclosures-mortgage-crisis-_b_995922.html?ref=tw for the _Huffington Post_ published Wednesday, Barosky says we’ve seen just about all the results that are likely to come to fruition.

According to Barofsky, HAMP's output looks on pace to meet the Congressional Oversight Panel’s projection “of just 700,000 to 800,000 effective permanent modifications through the lifetime of the program, a small fraction of the original goal.”

He adds that there is no reason to suspect HAMP will see any significant improvement, with only a net increase of about 23,000 permanent modifications per month over the most recent quarter. Trial plans have been hovering around that same number per month.

“This is a far cry from the 20,000 to 25,000 trial modifications per week that Treasury officials once predicted,” Barofsky says.

When HAMP was first rolled out, that announcement came with the goal of helping 3 to 4 million homeowners stay in their homes through permanent government-subsidized mortgage modifications.

“By any meaningful definition, that effort has been a failure,” according to Barofsky.

In response to their critics, Treasury officials stress that HAMP has set the standard for successful modifications for the industry, with a track record that proves the program puts distressed borrowers on a path of sustainability.

In a report ""released late last month"":http://www.occ.gov/publications/publications-by-type/other-publications-reports/mortgage-metrics-q2-2011/mortgage-metrics-q2-2011.pdf, the Office of the Comptroller of the Currency (OCC) said, “HAMP modifications have generally performed better than other modifications implemented during the same periods.”

The regulator’s data show that 17.4 percent of the loans modified under HAMP during the first quarter of 2010 were 60 or more days delinquent after nine months, compared to 31.9 percent of those modified under other programs.