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The federal government's principal foreclosure prevention program has put 504,648 distressed homeowners into permanently modified loans since it was launched in March 2009. Treasury ""released new numbers"":http://www.financialstability.gov/docs/Nov%202010%20MHA%20Report.pdf 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 last month.
[IMAGE]Permanent modifications were granted to 30,000 borrowers in November, 26 percent more than in October. The number of trial modifications started also rose. In November, 31,300 new trial plans were initiated, up about 20 percent from the previous month.
Treasury says servicers are continuing to work through the backlog of HAMP trials that have lasted six months or more. The number of these aged trials has no fallen below 50,000.
According to Treasury's report, for those borrowers in active permanent modifications, the median monthly savings is $524.41, or 37 percent of the median payment before modification. Aggregate reductions in monthly mortgage payments for borrowers who received permanent modifications are estimated to total $4.1 billion.
[COLUMN_BREAK]Critics of the program, though, point to the fact that at its current pace, HAMP will fall far short of the administration's goal of helping 3 to 4 million homeowners save their homes from foreclosure. The Congressional Oversight Panel ""warned last week"":http://dsnews.comarticles/hamp-will-fall-short-of-goals-with-only-700k-homeowners-helped-report-2010-12-14 that ""absent a dramatic and unexpected increase in HAMP enrollment…an untold number of borrowers may go without help."" The watchdog group estimates that the program will ultimately help only 700,000 homeowners.
The program has also been plagued with large fallouts, as homeowners in trial plans were unable to stay current on their modified payments or failed to meet program requirements for transitioning to permanent status. Of the 1.43 million trial plans extended, over half have been cancelled. In addition, 45,000 permanent mods have been terminated from the program.
Still, federal officials assert that HAMP has laid the groundwork for more sustainable modifications through servicers' own proprietary programs and other constructive foreclosure alternative options.
According to a ""supplemental report"":http://portal.hud.gov/hudportal/documents/huddoc?id=DEC_SCORE.pdf released by HUD Wednesday, in addition to HAMP's numbers, more than 600,000 borrowers with Federal Housing Administration (FHA) loans have received loss mitigation and early delinquency interventions and nearly 1.8 million proprietary modifications have been completed under HOPE NOW's guidance since April of last year.
HUD's report also noted that foreclosure starts and completions dropped significantly in November. As lenders review internal procedures related to foreclosure processing, many foreclosure actions have been delayed leading to a 21 percent drop in foreclosure activity in November.
While this is the biggest month over month decrease since 2005, HUD says the decline is likely to be temporary as lenders eventually revise and resubmit foreclosure paperwork in the coming months.
