Permanent Loan Mods Under HAMP Edge Closer To Half Million

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At last, permanent mortgage modifications under HAMP made it to 483,000. It has been a struggle but the numbers are finally piling up. In October there were about 16,634 permanent loan modifications. This is down slightly from the September number of 17,771. Not great numbers, but when we look at the big picture, they are moving in the right direction.

One of the main concerns about HAMP is the dropout rate. The drop out rate continues to rise. There were 26,679 home owners leaving HAMP in October This brings to 756,000 the number of borrowers that left the program. The objective of President Obama's Making Home Affordable was to help over 3 million homeowners keep their homes.

Another concern is the return on the taxpayers' money . A fund of $75 billion was set aside to reward investors, lenders, and mortgage servicers to get the loan modifications completed. So far the process has been slow. This leads to frustration on the part of homeowners, and as a result, many simply give up and walk away.

HAMP can be seen as the first choice for borrowers looking for a solution to lower their mortgage payments. Not all borrowers are successful under HAMP's guidelines. The banks become the second choice. They can now structure and implement a mortgage modification utilizing a proprietary product. Loan servicers report that their proprietary product "outsells" the HAMP product 3 to 1.

HAMP has received criticism because results were not immediately evident. Like any new project or program it takes time to get most of the kinks out. Let's give HAMP more time.


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