Treasury Releases HAMP Redefault Rates

Written by John Clapp
on July 21, 2010 No Comments
Categories : Mortgage Servicing

han 91,000 trial modifications under the Home Affordable Modification Program (HAMP) were canceled last month as servicers worked through a backlog of aged trials, the [link=http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-153]Obama administration[/link] reports. Of those that were canceled in June, more than 60% of the modifications had been in a trial period for six months or longer. Servicers also converted 51,205 trials to permanent modifications – about 3,500 more conversions than occurred in May. The number of trial modifications reported in June also increased from May, growing from 30,099 to 38,728. The Treasury included several new reporting areas in its June servicer performance analysis, including redefault rates, customer service metrics and updated participation data on the short-sale and second-lien subprograms. Four of HAMP's eight largest servicers are not participating in the Second Lien Modification Program (2MP), the Treasury says. American Home Mortgage Servicing Inc., GMAC Mortgage Inc., Litton Loan Servicing and OneWest Bank are not taking part in 2MP, while Bank of America, JPMorgan Chase, Wells Fargo and CitiMortgage have committed to the program. Since federal officials originally announced the program last year, 2MP was been slow to get off the ground. Bank of America, which was the first shop to announce its participation, became operationally ready for 2MP in April. JPMorgan Chase followed, becoming operationally ready in May, while Wells Fargo is shown to implement 2MP sometime this month. The Treasury report says CitiMortgage it will be operationally ready in October. All eight servicers have begun offering short sales or deeds-in-lieu under the Home Affordable Foreclosure Alternatives program. Also published in the June report are recidivism rates for HAMP modifications, a topic on which the Treasury had been largely silent. Six months after converting to a permanent modification, 5.9% of HAMP loans are 60+ days delinquent, and 1.7% are 90+ days delinquent. Nine months after permanent modification, the rates bump up to 7.7% for the 60-day bucket and 2.4% for the 90+ day bucket, the Treasury

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