May 11, 2011 (Chris Moore)

After a fast start, the Home Affordable Modification Program (HAMP) has settled into the role as the tortoise in the race to the loan modification finish line. According to the Obama Administrations April Housing Scorecard, 35,432 loans were modified in March under HAMP bringing the total number of permanent loan modifications to 670,186.

In addition, the number of trial modifications that were started in March was at an almost equal amount of 36,827, which exceeded the previous six month average of 29,000 new trial modifications per month.

So far there have been 1,559,023 trial modifications started. Of the 670,186 permanent modifications that have been granted, 83,270 permanent modifications have been canceled, leaving 586,916 permanently modified loans that are still currently being paid. There have been 751,474 trial modifications canceled because the borrower fell behind on the payments during the trial period, was not able to provide required documentation, or was ineligible to participate in the program.

“The housing data in this month’s Scorecard offer continued mixed signals and some signs of weakness in the market – despite growing evidence of progress in the broader economy,” said HUD Assistant Secretary Raphael Bostic. “The Administration has been consistently committed to helping American homeowners and borrowers who have been hit hard by the economic recession and housing crisis, and our efforts have helped millions to avoid foreclosure and gain a more stable footing. That said, we still have more work to do to reach the many households who still face trouble.”

The report also reveals a direct relationship between how the size of the reduction on a borrower’s monthly mortgage payment significantly impacts the performance on the loan.

The report found that after one year, 11.7 percent of borrowers who saw a reduction of 50 percent or more on their mortgage payment were now 60+ days delinquent. Borrowers who saw payment reductions of less than 20% were almost three times more likely to be 60+ days delinquent (32.1%).

Overall, the median payment reduction for a permanent loan modification was 37 percent, or about $500.

“The numbers of homeowners both entering HAMP and converting from trial to permanent modifications each month are a powerful reminder of the role this program is playing in delivering much-needed assistance to families facing a housing market that is still very tough,” said Acting Assistant Secretary for Financial Stability Tim Massad. “And by providing modifications that are sustainable for homeowners over time, HAMP is setting standards for the industry that ultimately mean more options for more families to avoid foreclosure.”

California continued to have the highest percent of HAMP loan modifications accounting for 23.8 percent of total activity. California to date has tallied 139,269 total HAMP permanent loan modifications.

Bank of America has had the most loan modifications with 150,449 total active modifications, followed by JPMorgan Chase with 100,661, and Wells Fargo Bank with 95,647 total active modifications.

Including HAMP, more than 4.5 million modification arrangements were started between April 2009 and the end of March 2011, that also included more than 808,000 FHA loss mitigation and early delinquency interventions, and nearly 2.2 million proprietary modifications under HOPE Now.

While some homeowners may have received help from more than one program, the total number of agreements offered more than doubled the number of foreclosure completions for the same period (1.9 million).

Homeowners granted permanent modifications realize aggregate reductions in monthly mortgage payments of nearly $5.9 billion, program to date.

And we’re not even at the finish line yet…

Tags: Making Home Affordable Program, HAMP, loan modifications, trial modifications, permanent modifications, mortgage payment reductions, median payment reduction, HOPE NOW

Treasury Department