Original Post Date: 1/15/10
The U.S. Department of the Treasury and the Department of Housing and Urban Development (HUD) today released an update on the administration’s nationwide campaign to help borrowers in the trial phaseof their modified mortgages convert to permanent modifications under the Home Affordable Modification Program (HAMP). The new December data demonstrates that there has been a significant acceleration in the rate at which borrowers are being approved for permanent modifications.
As of December, more than 112,000 permanent modifications have been approved, including 66,000 that borrowers have accepted and the remainder awaiting only the homeowner’s signature. Under HAMP, more than 850,000 homeowners have had a median payment reduction exceeding $500.
“Treasury is committed to working with servicers and borrowers to sustain this improved pace,” said Chief of Treasury’s Homeownership Preservation Office (HPO) Phyllis Caldwell.
HUD Senior Advisor for Mortgage Finance William Apgar echoed this commitment: “HUD will continue to work with our Administration partners and utilize our broad network of housing counseling agencies to increase the number of borrowers receiving sustainable and affordable modifications under HAMP.”
The administration has taken a number of steps to assist servicers in ramping up to give eligible homeowners the opportunity to participate in HAMP.
Over the past month, federal officials were on-site in servicer offices to ensure the companies increased efforts to deliver decisions to borrowers in trial modifications who had submitted all of their documents and to obtain any missing documents from borrowers. The administration also implemented a temporary review period – which extends until January 31, 2010 – to ensure that all borrowers are being fairly evaluated for the program – the temporary review period extends until January 31, 2010.
HAMP was designed to offer up to 3-4 million homeowners reduced monthly mortgage payments that are affordable and sustainable over the long-term, over the life of the program. Currently, several million homeowners are estimated to be eligible for the program and more than 1 million have already received modification offers.
At this pace, the Treasury says the program is on track to meet the goals that President Obama laid out in announcing the Homeowner Affordability and Stability Plan.
This plan included several housing initiatives beyond mortgage modifications, including support for Fannie Mae and Freddie Mac to keep interest rates low and facilitate mortgage affordability across the market, increased flexibilities for Fannie Mae and Freddie Mac in refinancing mortgages to provide homeowners with lower monthly payments, tax credits to support development of affordable housing, and support to state and local housing finance agencies