Monday, March 15, 2010

Loan Mod Conversion Rate Improves in February. True Success Depends on Job Creation

  • The government foreclosure prevention programs are seeing more success in the Making Home Affordable Program.

  • The sad thing is that the success rate is really low, and a large part of this is because many of the troubled borrowers just don't have income sufficient to make any kind of house payment, let alone house payments on loans they can't afford.

    tags: loan, modification

    • The Making Home Affordable Program (HAMP), a joint effort by the Departments of the Treasury and Housing and Urban Development to prevent foreclosures, is reporting that 168,708  homeowners have now graduated from the HAMP trial modification program and have active permanent modifications by the end of February. This works out to a 12.4 percent conversion rate, a modest improvement from January when the permanent modification conversion rate was 9.2 percent.

      The program, which began last spring, has now enrolled 1,094,064 borrowers in modifications which lower mortgage payments to a maximum of 31 percent of monthly income.  1,354,350 invitations to participate in the program have been extended to distressed homeowners.  This is 34 to 45 percent of the goal of 3 to 4 million set for the end of 2012.  At present 835,194 loans are in some phase of the trial period, a number which includes the pending permanent modifications. To date 88,663 trial modifications and 1,499 permanent modifications have been cancelled.   The report does not give any reasons for the cancellations. In addition, 91,843 borrowers had successfully completed the three month trial period and permanent modifications were awaiting borrower acceptance.

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