Under the Home Affordable Modification Program (HAMP), servicers entered trial modifications on 360,165 loans, according to the Treasury Department's most recent figures, which cover data through August. That represents a month-over-month increase of almost 125,000 trial modifications but only about 12% of the estimated eligible 60+ day delinquencies serviced by HAMP participants.
Trial-plan offers have been extended to 19% of the estimated eligible 60+ day delinquencies, or 571,354 loans.
Although the Treasury says HAMP is on its way to reaching the 500,000 trial-modification goal set for Nov. 1, the department's assistant secretary for financial institutions, Michael S. Barr, told a House subcommittee that HAMP has limitations.
"Even before the current crisis, when home prices were climbing, there were still many hundreds of thousands of foreclosures," Barr said before the subcommittee. "Therefore, even if HAMP is a total success, we should still expect millions of foreclosures, as President Obama noted when he launched the program in February."
In August, CitiMortgage started trial modifications on 17,179 loans, Bank of America started trials on 31,906 loans, JPMorgan Chase began 26,984 trial mods and Wells Fargo started trials on 12,953 loans.
For trial modifications as a share of estimated eligible 60+ day delinquencies, Saxon Mortgage Services Inc. again led the way, having entered trial modifications on 39%. Nationstar's percentage of trial modifications started jumped month-over-month, from 19% at the end of July to 30% at the end of August, landing the company in second place on the Treasury's "trial modification tracker." GMAC Mortgage Inc. (26%) and JPMorgan Chase (25%) held onto their spots, in third and fourth place, respectively. CitiMortgage came in fifth, with trial modifications started on 23% of its eligible 60+ day delinquencies.
In his testimony, Barr outlined some of the measures the Treasury has taken in increasing borrower awareness of the program and trying to improve accountability among HAMP participants.
The department has worked with an interagency team to establish a call center for borrowers to reach housing counselors approved by the Department of Housing and Urban Development, in addition to creating a borrower-facing Web site and holding foreclosure prevention workshops in cities with high foreclosure rates, Barr said.
The Treasury is also developing denial codes that servicers will use to report the reasons borrowers are denied modifications. Servicers will be expected to report the codes to both the Treasury and to borrowers, and the administration is aiming to have the codes operational beginning Oct. 1.
Freddie Mac, HAMP's compliance agent, was tapped to create a second-look audit program, which began Aug. 3. Among other duties, the program examines nonperforming loan portfolios to identify borrowers who should have been offered modifications but were not.
In an initiative that began months ago, the administration is continuing to encourage servicers to ramp up their capacities and borrower-outreach efforts. The Treasury's recommendations for servicers include adding staff, expanding call centers, bolstering training, adding mailings to potentially eligible borrowers and enhancing online offerings.
Barr also said that the administration is working with servicers and Fannie Mae to streamline application documents and develop a Web portal. Such a portal would serve as a "centralized point for modification applications and for borrowers to check the status of their applications," he testified.