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.
Full report link