Saturday, January 16, 2010

December Treasury-HUD Report on the HAMP

Yesterday the Department of Treasury and HUD released a report that there has been a "significant acceleration in the rate" in which Home Affordable Modification Program ("HAMP") trial period mortgage modifications are being converted into permanent modifications. The report that as of December, more than 110,000 permanent modification have been approved of which 66,000 have been accepted by the borrowers. The HAMP was "designed to offer through 2012 up to 3-4 million homeowners reduced mortgage payments that are affordable and sustainable."

The administration estimates that several million homeowners are eligible for the program. During the 4th quarter of 2009, the number of servicers agreeing to participate in the HAMP with respect to their non-GSE loans rose from 63 to 102. This is in addition to the approximately 2,300 other lenders who service GSE loans (owned or guaranteed by Fannie Mae or Freddie Mac).

The report relates the following steps made in the permanent mortgage modifications (by "waterfall steps") : 1. interest rate reduction (100% of mortgages), 2. term extension (43.2% of mortgages), and 3. principal forbearance (26.6% of mortgages).
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