Obama Loan Modification Program if Accelerating Conversions
The U.S. Department of the Treasury and HUD released an update on the Administration’s aggressive campaign to help borrowers in the trial phase of the Obama Loan Modification Program where home loan modifications convert to permanent home loan modification under the Home Affordable Modification Program (HAMP). The December data demonstrates a significant acceleration in the rate at which borrowers are being approved for loan modification. More than 110,000 permanent home loan modification applications have been approved, including 66,000 that borrowers have accepted and 46,000 awaiting only the borrower’s signature. Under HAMP, more than 850,000 homeowners have had a median payment reduction exceeding $500.
The Administration has taken steps to assist giving homeowners the opportunity to participate in HAMP or Obama Loan Modification program. Administration representatives ensure that servicers increased efforts to deliver decisions to borrowers in trial modifications who have submitted all of their documents and to obtain any missing documents.. The Administration also implemented a temporary review period to ensure that all borrowers are being fairly evaluated for the program.
HAMP was designed to offer through 2012 up to 3-4 million homeowners reduced monthly mortgage payments that are affordable over the long-term. Several million homeowners are estimated to be eligible for a loan modification and more than 1 million have already received a home loan modification. At this pace, the program is on track to meet the goals of the Obama Loan Modification Program plan President Obama laid out in announcing the Homeowner Affordability and Stability Plan to keep interest rates low and facilitate mortgage affordability across the market, increased flexibilities for Fannie Mae and Freddie Mac in refinancing mortgages to provide homeowners with lower monthly payments, tax credits to support development of affordable housing, and support to state and local housing finance agencies.
As part of an ongoing commitment to continuously provide greater transparency in all of the Administration’s financial stability efforts, the December report includes several new measurements including a breakdown of permanent loan modification characteristics. These characteristics include predominant hardship reasons and monthly payment savings.
