Treasury Report Suggests New Mortgage Modifications Slowing

The Treasury released its monthly report (.pdf) today on its Home Affordable Modification Program (HAMP) through February. There's not a lot of surprising or shocking news to report. It continues to see moderate improvement in servicers making modifications permanent, adding another 52,905 in February. That brings the total active permanent modifications to 116,297, still a ways off from their target of 3-4 million. Perhaps most notable is that the new trial modifications appear to be slowing.

Here's a graph showing how many new trial modifications were started each month since the program has been going:

hamp mods 2010-02.PNG

I added in permanent modifications just for fun. But if you look at the red line, you can clearly see that, since October, new trials have steadily declined. February marks the lowest number since last May.

Also interesting to note is that, of those trial modifications that have run their course, 116,297 are permanent and 61,481 have failed. That's a roughly 65%/35% success/failure rate. Not bad, but if that ratio holds going forward, then the remaining 830,438 active trials would only yield about 543,247 additional permanent modifications. There would potentially be more than that with additional trials started in the months to come. But as the chart above shows, those trials are slowing, so the numbers there will likely be limited. At this point it looks like reaching the one million mark will be challenging.

These monthly reports get harder and harder to read, because the Treasury keeps changing how what data they include and how they present it. I noted this last month, and the changes continue. Again, check out the evolution of the most important chart (now charts) in the report over the past several months:

From the December report:

Dec HAMP chart.png

From the January report:

Jan HAMP chart.png

From the February report:

Feb HAMP charts.PNG

That final new stat on the latest chart is also rather amusingly presented. I wasn't aware that the Treasury's goal was merely to "offer" 3-4 million modifications. I thought when they said they wanted to "reach up to 3 to 4 million at-risk homeowners," they meant to permanently modify their mortgages. Silly me. Under their criteria, if they never achieved a single permanent modification then their goal could still be satisfied, so long as enough failed trials were offered. But then, if this line instead said "percentage to goal of 3-4 million permanent modifications", the result would read an embarrassing "4-6%" instead.

Another example of data presentation changing comes from their state delinquency maps. Check them out in January versus February:

Jan delinquency map.PNG
Feb delinquency map.PNG

At first glance you might think: Wow! Delinquencies really improved in February -- look at all that yellow! But, in fact, they didn't. If you look closer, you'll see that the map's legend changed.

Now look: I'm not implying that the Treasury is purposely trying to mislead people. They might have quite legitimate reasons for changing this report so drastically month-to-month. But from an analytical standpoint, it sure is frustrating. A little consistency would be appreciated.

(Nav Image Credit: edkohler/flickr)