In an article that came out last week on dsnews, writer Carrie Bay reports that Obama’s Making Home Affordable Program (part of the American Recovery and Reinvestment Act) that we learned about in March of 2009 has now seen approximately 300,000 successful permanent modifications.
Bay reports that the Treasury Department has now released April data reporting the numbers and success rate. “Of the nearly 300,000 permanent loan restructurings granted, 3,744 have been cancelled. Eighty-one of those cancellations occurred because the borrower paid off the loan. The remaining are the result of re-defaults.”
Bay goes on to report about the success rates of specific lending institutions. Interestingly, Ocwen and HomEq Servicing have the highest permanent modification conversation rate at 83%. It is believed that this is due, in part, to the fact that these institutions do not rely on stated finaicial data in order to make decisions about modification.
Bank of America and Wells Fargo have a 25% conversion rate to permanent modification. JP Morgan Chase and Citi report lower percentages. All HAMP participating lenders, as of June 1, will be required to obtain necessary borrower documentation in order to verify any income before making decisions about qualifications. It is believed that this measure will improve the success rates of these lending institutions.
It is interesting to note that part of what got “us” all into this tumultuous real estate market were stated income loans. Yet, it is exactly this same stated income that four of the major lending institutions were again relying upon to make important decisions about long term loan modifications for their customers.
To read the article in its entirety, please click here: HAMP Servicers Put Nearly 300,000 into Permanent Loan Modifications
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