HAMP Homeowner Help Still Coming Too Slowly
The Obama administration continues to make halting gains in its efforts to help struggling homeowners, according to a new self-assessment released today, but those efforts are still falling far short of their initial promise.
More than 20,000 homeowners got trial loan modifications under the administration's Home Affordable Modification Program in December 2011, according to a report from the Departments of Treasury and Housing and Urban Development, up from 19,100 in November. So far, nearly 1.8 million homeowners have gotten trial modifications since the program was announced in February 2009, and 933,000 have received permanent modifications, according to the report. However, 932,449 trial and permanent modifications have been canceled since the program began, according to the Treasury Department, including more than 170,000 borrowers who have missed three or more payments even after getting permanent modifications, leaving only 762,839 active permanent modifications.
That is a far cry, however, from President Barack Obama's initial declaration that the HAMP program could help 3 million to 4 million homeowners with their mortgages. The administration last month announced it would extend the program through the end of 2013, and the pace of trial modifications has picked up a bit from the fall. But even with the extension, the program is unlikely to achieve the numbers projected by the president.
The program has been dogged by accusations of poor oversight and abuse by mortgage servicers, including the nation's biggest banks.
The Treasury Department has in the past refuted suggestions that its oversight of the program has been lacking. It has also said that any shortfall in hoped-for loan modifications under the program has been more than made up in private loan modifications, for which it says the HAMP program has set new industry standards.
The latest administration report card said the HAMP program has helped drive down new foreclosure actions, to just 58,300 in December from 71,700 in November and less than half the 121,500 in December 2008.
At least some of the slowdown in foreclosure activity has likely been due to uncertainty about the outcome of state and federal lawsuits over foreclosure practices. A broad settlement of those issues could be coming soon, which could open up the foreclosure pipeline again.
Even after getting loan modifications under HAMP, many homeowners have continued to struggle to make payments. According to a separate Treasury Department report today, 23 percent of all loans permanently modified under HAMP have fallen back into delinquency within 18 months.