More than 700,000 homeowners are in three-month “temporary” trial loan modification plans, but mortgage servicers have managed to convert only 31,382 to permanent modifications, according to the Treasury Department’s November report released today.
Given that the industry voluntarily modified, permanently, more than 100,000 mortgages per month just before HAMP was announced, these results are abysmal. Testimony before a Congressional hearing Tuesday on HAMP confirmed that 70% or more of homeowners on temporary modification plans are making payments, so the problem is largely in getting the paperwork for permanent HAMP modifications done.
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On March 4th, 2009 the Obama administration revealed its plan to help millions of distressed homeowners in danger of foreclosure. The program was proudly touted as the definitive way out of the current housing and mortgage crisis. Since April 2009 the program is responsible for 728,408 active modifications. 697,026 are in the trial period and 31,382 have been made permanent.
Although there has been plenty of time for loan servicers and lenders to strengthen their efforts and start making a considerable difference in preventing home foreclosures, many servicers have repeatedly chosen to aggravate the crisis through noncompliance and excuses.
They seem to be doing everything they can to prevent these modifications from becoming permanent. Like a scene out of “The Gang That Could’At Shoot Straight” multiple calls to a lender will always result in different stories by their so called customer service personell. Even worse many of these front line employees will outright lie to borrowers about the status of their files.
Is it a result of the new HAMP plan? You be the judge…
Prior to the introduction of HAMP, servicers’ efforts to modify loans had picked up a considerable amount of steam. By March of 2009 loan servicers’ efforts in private in house modifications were running at a pace of 120,000 per month. That means that if left to their own devices servicers and lenders had they continued at that pace would have completed modifications on more than 1.2 million loan modifications.
It is now harder than ever to get assistance from your lender due to the new heavy documentation and government bureaucracy created by HAMP.