Mortgage Mods Up to 856,000, But How Many Left Out?

The Obama Administration’s oldest foreclosure-rescue program has placed more than 850,000 homeowners into permanent modification to date, with a median mortgage payment reduction of over $520 each month, government officials said today in its latest update.
Since the inception of the Home Affordable Modification Program (HAMP) in March 2009, mortgage servicers have extended 1.7 million trials and started 856,974 permanent restructuring of loans as of September, up from the 816,000 cumulative total the previous month.
However, HAMP has come under repeated criticism from the program’s Congressional overseer and advocates for borrowers.
The bailout-funded housing support programs – primarily HAMP — continue to struggle to reach home­owners, with only $2.5 billion (5.4 percent) of the $45.6 billion in earmarked funds spent on restructuring the mortgages of those facing foreclosure, according to the most recent quarterly report to Congress released last week by the Office of the Special Inspector General for the Troubled Asset Relief Program (TARP).
TARP was the controversial program that bailed out the big banks in late 2008.
“There is disappointing participation (in HAMP) due in large part to poor servicer performance,” the Inspector General’s report said.
As of August, there were 974,095 eligible delinquent borrowers for HAMP, with 720,612 borrowers in active permanent modifications. The program is scheduled to continue until Dec. 31, 2012.
“If the current rate continues, 520,000 to 600,000 homeowners who are eligible for HAMP will not get a permanent modification before HAMP expires,” according to the report to Congress.
The Special Inspector General’s report urges the U.S. Treasury to force mortgage servicers to “change the status quo and help as many of the remaining eligible homeowners as possible stay in their homes.”
The report to Congress said that homeowners have complained of many trial modifications lasting longer than the intended three-month period and that many trial modifica­tions fail to ever convert to permanency. There also have been complaints of not getting timely responses when grievances are escalated.
“These complaints are borne out by hard facts, with 22 percent of trial modifications lasting more than six months,” the Special Inspector General said. homeowners were wrongly denied a conversion from trial to permanent modi­fication.

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