Is Home Affordable Modification Program Working?

The United States Treasury Department released the lasted Home Affordable Modification Program numbers on February 17th and did their level best to put a positive tone on the less than positive numbers. The program numbers reveal a complete failure to meet the objectives.

Millions of homeowners have been lured into payment plans that are a temporary fix with a false sense of permanent loan restructuring to follow. According to the numbers that have been compiled over eleven months only one in ten homeowners have had their mortgage permanently modified.

Homeowners in those trial modifications for example short term payment plans account for over one million and were given until January 31st to convert to a permanent modification which makes the numbers of one in ten mortgages being modified disturbing at best.

The United States Treasury reports that thirty three percent of those homeowners in trial modifications have actually missed payments during the modification trial period. The percentage translates into over five hundred thousand homeowners in trial modification are not making payments on time and are being forced out of the modification program according to the treasury presumably due do missing paperwork.

Mortgage servicers prior to the Home Affordable Modification Program were permanently modifying approximately one hundred thousand loans month. Home Affordable Modification Program numbers show that the programs highest monthly numbers to date was fifty thousand additional permanent modifications by January of this year. New foreclosures filings every month are adding two hundred fifty thousand to three hundred thousand properties to this catastrophe every single month and increasing.

The United State Treasury attempting to put a positive spin pointed out that seventy six thousand modification offers were still pending at the end of January which could be added to the one hundred sixteen thousand completed modification loans. Forty six thousand of those offers however were pending in December which the treasury used in it January figure. Defaults, foreclosures, and foreclosure sales are conducted monthly and to give an assessment on an eleven month total is not a fair assessment. If we were to receive a fair assessment of the Home Affordable Modification Program the treasury should put the numbers out showing the monthly totals.

The servicers in the game for their part are lacking as well. Bank of America is still behind all of its competitors when it comes to permanent modifications. Bank of America has only completed three thousand two hundred permanent modifications of the million eligible mortgages. Bank of America’s competitors are producing ten times that when it comes to trial modifications and conversion of rates. Bank of America in addition holds more eligible delinquent mortgages than any other company.

The Home Affordable Modification Program is a failure and the administration needs to address its response to the mortgage crisis.