The number of permanent loan modifications started under the Home Affordable Modification Program (HAMP) finally exceeded 600,000 in January, but only 539,493 remain active, according to the latest report released today from the Treasury.
During the month, 27,957 permanent modifications were started, a decline from the 30,030 started in December as the program continues to loss steam.
Overall, 68,114 permanent loan modifications and 740,240 trial modifications have been canceled since HAMP got underway in late 2009.
But the conversion rate has improved significantly since June 1, when loan servicers were required to gather documentation from borrowers upfront.
“Servicers average a 61% conversion rate for all eligible trials started with verified documentation on or after June 1, 2010,” the report said.
“For trial modifications begun before June 1, the conversion rate averages 41%.”
Performance of Loan Mods Unknown
No performance data was in this month’s release, so it’s impossible to know many mods are re-defaulting, but it’s probably can’t be great if it’s not included.
However, with 100 percent of mods receiving a mortgage rate reduction and 30.4 percent getting some kind of principal forbearance, they may be outperforming proprietary modifications.
On the good news front, FHA-HAMP modifications are picking up, with both trial and permanent mods up significantly from one month earlier.