Obama Subsidized Mortgage Modifications Rise
Permanently modified mortgages grow by 45%, government says
In February, the number of homeowners with permanently reduced monthly payments grew to 168,708, the Obama administration reports, as 91,483 more trial modifications are approved.
The number of American households benefiting from lower mortgage payments under a government program at the end of February was up 6% from a month earlier to one million, the Treasury reported.
However, many borrowers continue to drop out of the Home Affordable Modification Program (HAMP), as they miss payments or lenders find they don’t qualify. More than 250,000 of the 1 million borrowers who have received trial loan modifications through the HAMP foreclosure prevention plan have either dropped out or been removed from the program through February.
As of February 28, 168,708 households had permanent loan modifications under the program, up 45% from a month before, while 835,194 were in the trial stage, up 0.6%. Borrowers accepted for the program are expected to make three monthly payments before their modification can be deemed permanent.
The $75 billion Home Affordable Modification Program was launched in 2009 to ease the foreclosure crisis by providing cash incentives to mortgage servicers to lower mortgage payments for homeowners who were 60 days or more behind on their loans. The HAMP is short of the 3 million to 4 million at-risk homeowners Obama targeted.
About 2.82 million homeowners lost their properties to foreclosure in 2009 and 4.5 million filings are expected in 2010, RealtyTrac. Foreclosure is expected to be about 3 million homes this year.
Citigroup Inc. had modified 52% of its estimated number of eligible loans.
J.P. Morgan Chase & Co. had modified 39% of its estimated number of eligible loans.
Wells Fargo & Co. had modified 37% of its estimated number of eligible loans.
Bank of America Corp. had modified 24% of its estimated number of eligible loans.
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