An important figure to watch in the HAMP program is the percent of trial modifications that have become permanent. The HAMP program starts out participants in three-to five-month trial modifications, and if they submit all the necessary paperwork and make payments on time, they are supposed to be entered into a permanent modification. Looking at the percent of trials that have become permanent tells a story of how likely HAMP is to make a long-term dent in foreclosure activity.
Here at Woodstock Institute, we’re tracking the mortgage lenders active in the Chicago area to see how they’re performing on their commitment to reducing monthly payments for distressed homeowners. Check back here every month to see who’s getting better—or worse. Note: these numbers reflect the national portfolio of these banks, not just the loans in the Chicago area. Local data is not available. Treasury announced that 33,514 trial modifications have been started in Illinois, but data on the total number of eligible loans have not been provided.
In front of an audience of more than eighty attendees from government, nonprofit, and private sectors, key leaders and participants envisioned a future where all would have the opportunities and protections necessary to achieve economic security and prosperity.
Seventeen lenders, as well as 2,300 participants with Fannie Mae- and Freddie Mac-insured loans, started modifications for less than the national average of 16% of eligible loans, while only nine lenders modified more than 16% of their eligible loans. Last month, sixteen lenders modified fewer loans than the national average, while eight lenders modified more loans than the national average.
Foreclosure filings are continuing on a slow drumbeat to an estimated 10 to 12 million. In order to outpace the rate of foreclosures, obligatory homeownership preservation programs must be extended to lenders beyond those who choose to or are required to participate in HAMP. A new bill in the Senate proposes programs that would require all lenders to take more action against foreclosure.