The latest statistics on from the Obama Administration’s Home Affordable Modification Program, or HAMP, do not look good, with over one-third of participants having been disqualified for permanent modifications and other predictions saying as many as 70 percent of borrowers will redefault even after receiving HAMP help.
Still, the stats show that of the 152,000 homeowners who had their trial mortgage modifications cancelled in May, almost 49 percent have been able to get other changes made to their loans by their mortgage servicers. About 2 percent of those have sold their homes with short sales, HAMP was also the needed boost that almost 10 percent of those borrowers needed to bring their loans current, but 7 percent still moved on into foreclosure and 3.6 percent filed for bankruptcy. And another 26 percent are simply waiting now to find out if they can receive additional help.
“The large majority of those who enter trial mods are still today successfully able to stay in their homes through the range of alternatives that are available to them,” said an overly optimistic Housing Secretary Shaun Donovan as quoted in a CNN article recently.
And Treasury Secretary Tim Geithner was also ready to pat himself on the back.
“The administration’s housing policies, combined with actions of the Fed, have lowered mortgage interest rates, helped stabilize home prices and reduced the rate of foreclosures, repairing some of the damage caused by the financial crisis to the financial security of millions and millions of American families,” he said.
Let’s just remember that we’re not out of the woods yet though. The HAMP program will be able to help fewer people from here on out as the qualifications have become stricter in terms of documentation. Those requirements have already started to week out potential HAMP clients with the number of new trial recipients falling to 30,099 in May, down from 47,160 in April, and almost 110,000 in December.
What’s more, there are now 11.3 million homeowners who are underwater on their mortgages, foreclosures are still rising and delinquency rates for borrowers with excellent credit history increased by a whole percentage point in the first quarter. HAMP may kept some borrowers in their homes, but it certainly won’t be able to seriously affect the country’s foreclosure rate at this point.