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Treasury Announces September HAMP Permanent Mod Starts Of 27,840, Lowest Since November 2009
Adding more fuel to the fire of SIGTARP's criticism of Tim Geithner is today's announcement that in September the UST started on a mere 27,840 permanent mortgage mods under HAMP: the lowest amount since November 2009, and a 17% decline from the 33,342 in August. It is rather obvious that HAMP bank mods peaked in April at 68,291 and have been trending lower back ever since. And with banks having the ability to foreclose upon and engage in who knows what shady dealings, now that it is all too clear that nobody really owns mortgage titles, and thus allowing banks to double, triple, etc-pledge the underlying collateral making far more money on a foreclosure action than a HAMP mod, it is time to declare HAMP a failure and relegate it to the mountain of failed economic policies pursued by the Obama administration, which have done nothing but result in yet another record bonus year for Wall Street.
Other tidbits from today's HAMP report:
- Early data indicate that HAMP permanent modifications are performing well over time.
Yeah, that's the kind of lies that gets Barofsky' s blood boiling.
- Nearly 28,000 permanent modifications reported in September.
- Homeowners in active permanent modifications realize a median monthly payment reduction of 36%, or more than $500 per month.
- For homeowners in permanent modifications, their median first-lien housing expense falls from 45% of their monthly income to 31%.
- Homeowners who do not complete the trial modification phase of HAMP are likely to find an alternative solution such as a proprietary modification or a short sale. Fewer than 16% have gone to foreclosure.
And even the mortgage mods converted to permanent are rapidly becoming re-delinquent: a quarter of all Mods older than 12 months are delinquent by more than 60 or 90 days, confirming the total catastrophe that HAMP has been from the start:
A far more informative table which breaks down HAMP-eligible borrowers by servicer is presented below. It shows, that courtesy of what is rapidly becoming the worst acquisition in BofA history, that of CFC, the bank has by far the greatest amount of eligible modifications (by nature of having the greatest number of serviced mortgages period), and yet it has one of the lowest conversion rates, demonstrating that it is one of the banks least willing to give borrowers a second chance (though we can't blame them: with a surging redefault rate, as we had expected before HAMP was even announced, what's the use?).
Another amusing observation, which readers can find on page 8 of the HAMP update, is that Bank of America has the slowest average speed to answer homeowner calls, at over 70 seconds (and a call abandon rate of 4.5% double that of the second worst, Goldman's Litton Homes), compared to under 20 for Wells and JPM and under 10 for Citi. That's some serious incentive.
In summary, it seems BofA is doing all it can to disencourage pursuit of HAMP alternatives, and instead seek the foreclosure approach. Which also explains why they have the most to lose from the current grind to a halt in the foreclosure process.
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Shocking. Never saw this coming. (Not).
Wall Street makes more on Foreclosures. If you take into account the they get a huge payoff on their CDS's. They Foreclose and then cause a loss so they can collect on their Credit Default Swaps. They make more on the Forclosures than they would on modifications. They get the full value of the Mortgage thru the Credit Default Swaps and still get some return from the House after Foreclosure.
Bullsh. Collecting on a CDS requires the other guy to pay. Peter pays Paul. "Wall Street" as a whole just moves money around. As for the foreclosure itself, the holder has to take an asset off the books and write down the loss. And the return on the house when sold is generally less than the cost of processing the foreclosure. Dead loss, dude. Don't kid yourself that the housing meltdown somehow has an upside.
Massive upside for anyone waiting to buy at a reasonable price, but that is somehow always forgotten.
GODDAMIT THEY ALSO GET A KICKBACK FROM THE FDIC !!!
http://www.trulia.com/blog/AnnetteLawrence/2010/02/banks_making_big_mone...
JEEZUS WHY DOESN'T ANYBODY GET ON THIS !!!
TYLERS !!!!!
I would assume that a agree upon short sale does not trigger the CDS for payoff.
Correct?
In case anyone missed it...
"I want a HAMP modification"
Very nice, why even modify when one can not pay and then dance in court all the wile spending the rent money on IPhones, iPads, and eating out?
Only 20% of Realtors survive in a 2 year period. So, in a 4 year period there are only 10% left. And so on an so on. Now you see why.
HAMP does not reduce principal. After seeing these figures, I give Joe Sixpack a little more respect. The public sees HAMP for what it is: an attempt by the gov to grab a headline. To me, as well as the vast majority of home owners (except the once who actually used HAMP), it makes no sense to refiance a underwater mortgage. It is better to get out and start fresh since the math does not work out. I dont think the goverment should do anything. I know, with the HAMP numbers the way they are, the gov really isnt doing anything. HAMP is just a talking point. For real substance, I suggest HEMP.
Not only that, if you refi an underwater mortgage you could expose yourself to recourse in non-recourse states.
Forget about HAMP, it's worthless. When the bank comes to change the locks on your doors while you are still in the house, greet the Asshat with a little pepper spray or my personal favorite; a 4.5 million volt stun gun. I mean, you should offer them something for the good fucking they are giving you!
http://www.stungunstopepperspray.com/
When HAMP fails, use TRAMP.
Plenty of homeless out there to stock the stable....
you'd even enjoy the employee hiring credit.
How about a HAMP modification of 25% prinicpal reduction, and -5% interest?
Oh wait, not enough for T&I, how about +20% P and -10% I?
Treasury needs to offer market rate mortgages (around 4%) to all underwater GSE and FHA borrowers who have been current on their mortgage for the past 2-3 years. THese responsible borrowers have been shut out. It is a small but necessary step to help relieve consumer debt burdens for those that need it most. Most of these borrowers took out loans between 2005 and 2008 and have not been able to refi.
Yay, moral hazard for everyone!!! Except for those who saved and rented or paid off their mortgages as soon as possible. Okay - Yay, moral hazard for all idiots and near-idiots. And while you're at it bail out those who bought the banks near the highs or maybe the homebuilders or how about just about anything? Or how about those who didn't buy since now they might be up money.
Here's a concept: Choose to let the market sort it out or abolish the market since it really has no purpose.
On a separate note, it's nice to see that Bernanke has chosen to look into the foreclosure process at the banks now that fraudclosuregate is month's old. It's not like its a major item affecting millions of folks going through the process and from his lofty perch it would be hard to spot with a little foresight that maybe it might be a good thing to get in front of oh say 2 years ago.
Govt is on the hook for the loan anyway - talking about just GSE and FHA loans -no principal reduction/no below rate mortgage. If anything, it reduces risk to the taxpayer. Not bailing out anybody. The risk is already there - the only people benefitting at risk are holders of premium MBS.
You've been on that soapbox for, what, a year now?
Ain't gonna happen, nor should it.
Yeah. Been a while. Not talking about mass refi - that is stupid. GSE and FHA losses would be minimized if they did it. Truth is been talking about strategic default for well over 1 year and this is one small but important tool that has NO MORAL HAZARD and gives just enough help for those that are inclined to honor their obligation and work through the mess. Dude, when you have govt backed mortgages trading at a 110 dollar price which would be trading at 80c on the dollar without the guarantee it only makes sense to see those mtgs prepaid at par.. In reality, it should happen because it would DECREASE risk to the taxpayer and help improve consumer balance sheets.
HAMP is a complete joke. Feel sorry for anyone that got their hopes up thinking this was a help.
HAMPsterdance is old skool hopeium. It always makes me smile.
http://www.youtube.com/watch?v=ZW9yZhU9ytk
"In summary, it seems BofA is doing all it can to disencourage pursuit of HAMPiness, and instead seek the foreclosure approach."
Fixed.
And 75% of those will default by this time next year......
HUMP and PIPP...these ate Timmy's finest works!
O.B.A.M.A.: One Big Ass Mistake America