"The Obama administration has revised its latest monthly report on its signature foreclosure-prevention plan, deleting a heavily-criticized performance metric used to measure whether assisted homeowners are re-defaulting on their taxpayer-financed mortgages."
"However, one key detail -- the pace at which HAMP homeowners are falling behind on their new lower monthly payments and re-defaulting -- had been missing until last week, when the administration unveiled it in its report on the program's progress through June.
The rate was remarkably low, which raised eyebrows among some housing analysts. While about 42 percent of homeowners in mortgages modified prior to HAMP had fallen at least 60 days delinquent six months after their mortgages were altered, the administration reported that just under six percent of HAMP homeowners were at least 60 days late six months after their mortgages were modified, according to data maintained by federal bank regulators and the Treasury Department. Six months is considered to be a key metric for judging homeowners' ability to keep up with payments."
""In an effort to review and better explain the methodology, we learned from our program administrator, Fannie Mae, that not all cancelled loans were included in the underlying information provided to Treasury," Paustenbach continued. "The error caused inconsistent reporting of permanent modifications during the snapshots reported. These omissions have impacted our previous analysis... with respect to the performance of HAMP permanent modifications."
A Treasury official added that the agency had approved a methodology that included cancelled modifications, but Fannie Mae's coding error led to those mods not being included in their calculation of re-default rates. The official added that Treasury will release the revised data when it's confident in its accuracy."
Actually, it would appear that the Government MAY have been "spinning".
Kind of like the far too negative "spin" promoted by doom & gloom bubble bloggers, wouldn't you say? They're STILL harping on "facts" that existed a year or two ago, while lenders were trying to figure things out - very similar to the improvement in short sales. They also took more than a year to become easier to do.
Again, I refer you to the original few posts of this thread. The HAMP program IS improving every month, but it is only about 1/3 of all loan mod activity.
"The administration released new numbers Friday on its principal foreclosure prevention initiative, the Home Affordable Modification Program (HAMP). Housing analysts and market observers say the results are disappointing at best.
The latest performance report shows that nearly half of the homeowners approved for trial modifications have fallen out of the program. As of the end of July, 616,839 HAMP trials have been cancelled, out of the 1,307,489 trials started since the program began."
Here is an excerpt from the DSNews article, linked above by cdcrez:
"Recent estimates from the industry alliance HOPE NOWshow that there are currently nearly 4 million homeowners 60 or more days behind on their mortgage.
HUD Assistant Secretary Raphael Bostic repeatedly told media on the call, “Let’s be clear, when this administration took office, the housing market was in freefall. Over the last 18 months, that freefall has been stemmed.” To his credit, Bostic was quick to add, “I’m not saying we’re out of woods or there’s no difficult times ahead…. There are still rough patches out there … and we will remain vigilant.”
Allison also pointed out that half of the homeowners who have been booted from HAMP are receiving other assistance or have become current. Nearly 10 percent of those whose HAMP trials were cancelled have been pushed through to foreclosure, while 46 percent have received an alternative modification from their servicer.
Servicers are apparently saving more homes with their own proprietary mod plans than through the government program. HOPENOW reports that the industry completed 975,000 permanent loan modifications during the first half of 2010. Two-thirds of those were processed through servicers’ own mod programs; one-third have been HAMP modifications."
Treasury Secretary Timothy Geithner has long made it clear his financial repair plan was based on allowing large banks to "earn" their way back to health. By creating conditions where banks could make easy profits, Getithner and top officials at the Federal Reserve hoped to limit the amount of money taxpayers would have to directly inject into the banks. This was never the best strategy for fixing the financial sector, but it wasn't outright predation, either. But now the Treasury Department is making explicit that it was—and remains—willing to let those so-called "earnings" come directly at the expense of people hit hardest by the recession: struggling borrowers trying to stay in their homes.
This account comes secondhand from a cadre of bloggers who were invited to speak on "deep background" with a handful of Treasury officials—meaning that bloggers would get to speak frankly with top-level folks, but not quote them directly, or attribute views to specific people. But the accounts are all generally distressing, particularly this one from economics whiz Steve Waldman:
The program was successful in the sense that it kept the patient alive until it had begun to heal. And the patient of this metaphor was not a struggling homeowner, but the financial system, a.k.a. the banks. Policymakers openly judged HAMP to be a qualified success because it helped banks muddle through what might have been a fatal shock. I believe these policymakers conflate, in full sincerity, incumbent financial institutions with "the system," "the economy," and "ordinary Americans."
"It allows borrowers to snag the low rates even if they have negative equity up to 125 percent loan-to-value, something that would certainly prove a roadblock via traditional mortgage underwriting.
As a result, Wells is reportedly shutting down the HARP unit at the company’s St. Louis office.
According to one loan processor, they simply weren’t getting the applications necessary to justify staying operational."
"HAMP mods have affordability guidelines, which, for those lucky enough to actually get one, generally lead to a sharp decrease in monthly payments. There's also evidence that HAMP has had a positive impact on the terms of modifications that servicers have offered outside the government program. Those non-HAMP mods, which outnumber HAMP mods, are now more likely to lower payments, but not as much as HAMP mods."
In spite of all the negative "news" from the Gloom Gallery, there were STILL more loan modifications last year than there were homes foreclosed.
That means that more families got to stay in their homes, than lose them.
All this, of course, is merely MY opinion. Thanks for reading.
Bob Phillips - Realty ONE Group - South Orange County, CA
"HAMP mods have affordability guidelines, which, for those lucky enough to actually get one, generally lead to a sharp decrease in monthly payments. There's also evidence that HAMP has had a positive impact on the terms of modifications that servicers have offered outside the government program. Those non-HAMP mods, which outnumber HAMP mods, are now more likely to lower payments, but not as much as HAMP mods."
In spite of all the negative "news" from the Gloom Gallery, there were STILL more loan modifications last year than there were homes foreclosed.
That means that more families got to stay in their homes, than lose them.
"The Mortgage Bankers Association (MBA) boasts that its members have modified over five million mortgages over the past few years. As a data analyst focused on patterns of foreclosure fraud, I’ve analyzed tens of millions of pieces of information. I was willing to take the MBA’s claims at face value but, years ago, came to the conclusion that the MBA and their members have a severe credibility gap.
Remember, the reason for advocating mods is that, properly structured, they are a win-win: investors take a lower loss than they would in a foreclosure, the borrower stays in his house, and another real-estate-price-depressing sale is averted.
But this “everyone comes out ahead” is not what I’ve seen. I’ve been able to check modifications, since they are recorded in public records. It quickly became apparent that while theses modifications are, at best, worthless, and more often than not border on an extension of the same predatory practices that resulted in the original mortgages.
These modifications are to mortgages as vultures are to predators, another opportunity to take one last bite out of people trying to keep their homes. Banks are “modifying” lots of loans, but to terms even more favorable to banks."
