The Home Affordable Modification Program (HAMP) continues to put more homeowners into trial and permanent modifications, but the rate of new trial and permanent modifications is slowing month to month.
The Department of the Treasury released its eighth report card on how mortgage lenders are doing modifying loans for eligible homeowners under the government’s Making Home Affordable program (see the first, second, third, fourth, fifth, sixth, and seventh report cards).
The HAMP program starts out participants in three- to five-month trial modifications, and if homeowners submit all the necessary paperwork and make payments on time, lenders are supposed to approve a permanent modification. Treasury started reporting on permanent modifications by servicer in the November 2009 report card. In December, Treasury released numbers on permanent modifications by state and metropolitan area.
The Chicago metro area is lagging the national average in converting trial modifications to permanent status. As of February, 15.8% of trial modifications have become permanent in Chicago, while 16.8% of trial modifications have become permanent nationally. Of the top ten metropolitan areas with the most HAMP activity, Chicago is ninth in converting trial to permanent modifications, which is the same rank as the past two months (see chart A below).
In the Chicagoland Metropolitan Statistical Area, 51,301 trial and permanent modifications have started, up only 6.7 percent from 48,064 last month. National trial and permanent modifications increased by just 6 percent from January to February. The month-to-month increase in permanent and trial modifications has been decreasing since December, both locally and nationally (see chart C below).