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One Third of HAMP Modifications Redefault

Posted in HAMP 2

Three Years Later, One Third of HAMP Loan-Mods are Redefaulting Supposedly permanent loan modifications are defaulting at what the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) calls an “alarming rate”. The government’s Home Affordable Modification Program claimed that it would help between 3 and 4 million homeowners to avoid foreclosure via loan modifications. However, according to the SIGTARP quarterly report released last week, after four years of HAMP, only 862,279 homeowners are currently in an active permanent mortgage modification. The low number of total modifications is not the only bad news about HAMP. As of the end of last month, over 312,000 homeowners have redefaulted on their HAMP modification. As SIGTARP notes, “For these homeowners, the HAMP permanent mortgage modification they received was not sustainable.” The earliest HAMP permanent modifications, those negotiated in the third and fourth...

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