Mortgages: Feds OK 230,000 Modification Trials
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The Treasury Department says 400,000 modification offers have been sent out under the Making Home Affordable (MHA) loan modification program. So far, 230,000 borrowers have agreed to trial modifications.
These are enormous numbers compared to the Bush years. Under the FHASecure program about 4,000 delinquent conventional borrowers were able to refinance there has been just one loan completed under the Help For Homeowners plan (honest, really, just one).
MHA provides $75 billion for sustainable mortgage modifications through the Home Affordable Modification Program (HAMP) and it’s hard not to see that 230,000 trial modifications is a big deal. That said, there are other figures which are also important. For instance, how many of those 230,000 borrowers will successfully complete their trials? All they have to do is make three monthly payments on time, in full and their loans will be modified.
Seen another way, the new effort has already produced more than 50 times the activity of the Bush-era programs.
It would be great if most trials succeed, but then we come to the next issue: What about six months from now? How many of the loans which are modified will be current? The evidence to date from the Office of the Comptroller of the Currency is that most will again be delinquent.
And so, yes, kudos to the government for supporting Main Street, good luck to those who are trying to get permanent modifications, but lets see what the numbers show in a few months.
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