BY MORTGAGEORB.COM ON MONDAY 31 JANUARY 2011
The U.S. Treasury Department says that permanent modifications executed under the Home Affordable Modification Program (HAMP) are performing well over time. Of HAMP loan mods that became permanent in the fourth quarter of 2009, 15.3% were 90+ days delinquent one year later, according to the Treasury’s latest servicer performance report, which covers data through December 2010.
By comparison, federal financial regulators’ most recent Mortgage Metrics Report shows that nearly half (48.6%) of the loans modified by servicers in the first quarter of 2009 had redefaulted by the 12-month mark. HAMP loans that were modified in the third quarter of 2009 did not fare as well, falling into the 90+ day default bucket at a rate of 20.7%.
Approximately 521,600 permanent modifications were active as of the end of last year, the Treasury reports. More than 58,000 permanent modifications and 734,500 trial modifications have been canceled since the program began.
The Treasury Department’s statement follows the Jan. 28 introduction of a bill in the House of Representatives that seeks to shut down HAMP. Rep. Jim Jordan, R-Ohio, told TheHill.com that HAMP was a “colossal failure,” adding that the program was “one more example of why government interference in the private sector doesn’t work.”
SOURCE: U.S. Treasury Department