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Following up on my earlier rant about HAMP, via Calculated Risk we have the new statistics on the program from Treasury. And it’s really, really bad.
About 422 thousand modifications are now “permanent” – up from 389 thousand last month – and 617 thousand trial modifications have been cancelled – up sharply from 521 thousand last month.
According to HAMP, there are 255,934 “active trials”, down from 364,077 last month. There is still a large number of borrowers in limbo since only 165 thousand trials were started over the last 5 months. I expect another large number of cancellations in August.
Notice that the pace of new trial modifications has slowed sharply from over 150,000 in September to under 17,000 in July. The program is winding down …
They’re winding down their tentpole foreclosure prevention program at a time of record foreclosures. Cancellations are up – and that’s when the bank has all the leverage because they can try to recoup the difference between the temporary modification and the original payment – and permanent modifications are growing more slowly (and still aren’t much more than 10% of the original number promised). And permanent mod cancellations are up, too, because people who got the mod are missing payments.
What a complete frigging disaster.
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“permanent mod cancellations are up, too, because people who got the mod are missing payments”
Exactly! That’s why this program is not working. There is a lot of effort in doing a modification and to see it all washed away with a second default makes continuing such programs a waste of time.
Bring on the foreclosures. There has got to be some pain. Only then can the country start to recover.
There is no Santa Claus.
despite being up, they constitute 12,000 total out of 433,000 mods, about 2.7%.
Without a ‘rent to re-own’ provision, HAMP is just banks getting blood from a stone. This isn’t designed to help homeowners or voters — it’s just another bank welfare program.
As we have explained time and again, there are many people who would be helped by bankruptcy cramdown. It helps banks too.
David and Teddy, you’re both spot on when you say this will only help out the banks, that was no doubt the intent of Timmy and Larry and Ben from day one. We couldn’t be doing any worse if we let the real Three Stooges run the economy.
Part of the reason people with permanent mods are being dropped is because banks are looking for bullshit excuses to drop them- a trivial mistake in the paperwork, making their payments too early- any excuse they can find. I especially like that if by some miracle you get a permanent mod, it comes with an escrow account for taxes and insurance, which is just another profit center for the banks.
~~~EDITED IN MODERATION: Keep it civil, no matter the provocation, please.~~~