Loan Servicers Complete More Permanent Loan Modifications

January 15, 2010 No Comments »

loan mod

Banks and loan servicers participating in the Making Home Affordable program (HAMP) completed 66,465 permanent loan modifications through the end of December, up from 31,382 a month earlier, according to the Treasury Department.

Another 46,056 are pending borrower acceptance, putting the sum of permanent loan modifications approved by servicers at 112,521.

In total, 902,620 HAMP trials have been started since the program began in mid-2009, though the majority remain in the trial stages.

Per HAMP rules, to receive a permanent modification, borrowers must make at least three trial payments, provide documents that include proof of income and hardship verification, and have their credit re-underwritten.

All permanent loan mods resulted in mortgage rate reductions, while 43.2 percent had term extensions, and 26.6 percent included principal forbearance.

The median front-end debt-to-income ratio was lowered from 45 percent to 31 percent, while the median monthly mortgage payment fell just over $500.

The predominant reason for a permanent loan modification was “curtailment of income,” followed by “excessive obligation,” unemployment, and borrower illness.

Bank of America, which had completed only 98 permanent loan modifications under the program, boosted their total to 3,183 as of the end of December.

They’ve also got another 9,178 permanent loan mods pending, second only to mortgage lender Wells Fargo, which has 10,088 pending.

The San Francisco-based bank has already completed 8,424 permanent mods; GMAC Mortgage has completed 9,872, the most of any participating loan servicer.

Take a look at the charts provided by the Treasury below to see the numbers in action.

hamp by state

hamp by loan servicer

hamp proportion

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