More Than Half Of HAMP Trial Modifications Are Canceled

With more than half of HAMP trial modifications canceled, many industry analysts believe that the program is not working. Of the canceled trial modifications, less than half are …

With more than half of HAMP trial modifications canceled, many industry analysts believe that the program is not working. Of the canceled trial modifications, less than half are in the process of receiving modifications through another source, while more than 10% are in the process of foreclosure or have been foreclosed upon, and nearly one-third have action pending. See the following article from HousingWire for more on this.

The Making Home Affordable Program (HAMP) initiated 1.3m trials as of July 2010, but is having difficulty retaining program participants through the process of making their modifications permanent. According to the July Servicer Performance Report released by the US Department of Housing and Urban DevelopmentĀ  (HUD), 616,839 modifications have been canceled while 434,716 modifications have been made permanent throughout the program’s lifetime.

The eight largest HAMP servicers alone hold 409,981 canceled modifications. 45.5% of those borrowers are in the process of receiving an alternative modification, 9.8% are starting foreclosure, 2.3% are pursuing loan payoff, 2.7% are going through bankruptcy, 5.9% are current on their payments, 1.8% completed foreclosure and 30.1% have action pending.

Claim up to $26,000 per W2 Employee

  • Billions of dollars in funding available
  • Funds are available to U.S. Businesses NOW
  • This is not a loan. These tax credits do not need to be repaid
The ERC Program is currently open, but has been amended in the past. We recommend you claim yours before anything changes.

Quinn Eddins, director of research at Radar Logic, said the amount of borrowers canceling their HAMP trial mortgage modifications signifies that the current solutions under the program simply aren’t working.

“HAMP entails extending the period over which mortgages can be paid, which is all fine and good, but if the homeowner continues to be deeply under watt, there’s always going to be the incentive to stop paying the mortgage or redefault,” Eddins told HousingWire in an interview. “A new way of modifying mortgages should be explored.”

The HUD report noted the most common causes of trial cancellations are insufficient documentation, trail plan payment default and borrower eligibility (many drop their debt-to-income ratio below 31% before completion of the trial).

This article has been republished from HousingWire. You can also view this article at
HousingWire, a mortgage and real estate news site.

advertisement

Does Your Small Business Qualify?

Claim Up to $26K Per Employee

Don't Wait. Program Expires Soon.

Click Here

Share This:

In this article