Yesterday, I wrote about some new data in the Treasury's monthly report (.pdf) on its Home Affordable Modification Program report. There is another really interesting chart in the report I think worth mentioning: the progress report for banks and servicers making modifications. It shows that some banks are having great success modifying mortgages, while others struggle.
The chart I'm talking about lists the most major banks and servicers taking part in the program. It then provides a bunch of different data points including estimated eligible delinquent mortgages, trial modification progress and permanent modification progress. Rather than just paste the chart in this post, I thought it might be more useful to sort the banks and servicers based on several different measures of how well they're doing.
Trial and Permanent Modifications vs. Total Eligible
First, let's look at a sorted version of a column that the chart itself actually provides: the total trial and permanent modifications as a share of eligible delinquent mortgages. This is a sort of all-in progress measure, since some of those trials won't achieve permanent status and the percentage considers the entire pool of potential troubled homeowners that could qualify for modifications. Here's how it breaks down:
The clear leaders are Citi and GMAC. They've made progress modifying a full 50% of estimated eligible mortgages. That's quite impressive. A few other big banks aren't far behind, with JP Morgan and Wells Fargo also above the average ("Total") performance. Less impressive is Bank of America, with only a 22% score. Purely pitiful is Wachovia with just 3% of its eligible mortgages modified.
Permanent Modifications vs. Trials Extended
Next, let's look at a different measure: the percentage of modifications have been made permanent out of those total trial modifications extended. This shows the challenge banks and servicers are having bringing mortgages from trial to permanent status:
Here, some of the smaller servicers are leading the way. Wells Fargo is the only big bank that even manages to tie the average score of 9%. Meanwhile, some of the other big ones like JP Morgan, Bank of America and Wachovia are struggling, with scores of 5% or less.
I included an extra column here, because I think there's a story to be told. Smaller servicers are generally doing much better than the larger ones. This could be used to support the thesis that the big banks are having logistical difficulty with processing all of these modifications. Whether they don't have enough staff or just have poor systems for keeping their documents organized, something is going wrong.
Permanent Modifications vs. Total Eligible
Finally, let's consider how many modifications have been made permanent as a total portion of those eligible. This shows progress servicers have made bringing modifications permanent versus what was possible in totality:
Interestingly, GMAC leads the way here. Citi and Wells Fargo are also above average, though their scores are still only single-digit percentages. The scores of some others, like Bank of America and Wachovia are really quite ugly. They've barely made any progress in permanently modifying their pool of bad mortgages.
Just How Many Mortgages Are Eligible?
This report's servicer progress chart provides one other puzzling data point. In the second chart above, you can see that the total estimated number of eligible loans is about 3.4 million. Yet, yesterday, I noted a new chart that the Treasury provided in the report this month claims the total number of estimated mortgages eligible for the program is only about 1.7 million. These numbers can't both be correct, and they're very far off. If the servicer chart is accurate, then the program on a whole isn't doing nearly as well as that new chart would imply. But if the new chart is right, then the servicers are doing much better than their chart would indicate.
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