For a few years now, we've been hearing about the government's mortgage modification program ("HAMP"), but it hasn't been clear who, in particular, is benefiting. Although the program hasn't come near the goals it sought -- to prevent a few million foreclosures -- over a half million Americans have obtained permanent modifications through HAMP. This month, the Treasury provides some data to tell us a little about the Americans who have managed to qualify for its program.
December HAMP Update
But before getting into those statistics and charts, here's the quick update on the program's progress through December:
Last month, the number of new trial modifications started was around 30,000 -- steady at the level we've seen since September. The number of modifications made permanent also appears to be leveling off at around 30,000 per month. Finally, like last month, about 18,000 modifications were canceled. But in December, the ratio shifted to more permanent modifications canceled than trials. Permanent modification cancellations peaked in December at 13,000.
The program also appears to continue to do well in terms of re-defaults. Its rates are steady to what we saw in October through the second quarter. Through November, after one year just 20.4% of modifications were 60 or more days delinquent, and just 15.8% have payments 90 days past due. That might sound like a lot, but re-default rates for mortgage modification programs often exceed 50%, so these results look pretty great -- if they hold up. It's important to remember that many HAMP modifications include terms that have monthly payments reset to higher rates for several years. So we won't know a true re-default rate until as least 2014, but so far so good.