Tuesday, November 10, 2009

Loan Modifications: Key Numbers not Released

by Bill McBride on 11/10/2009 03:17:00 PM

From Reuters: Treasury says 650,000 in trial home loan workouts

[The Treasury Department] said there were 650,994 active trial modifications through October under President Barack Obama's plan to help the housing market. That was up from 487,081 ... participating through September.

The Treasury did not release figures for trial modifications that have been made permanent.
The key number - permanent modifications - was not released. As of Sept 1st, the Obama plan had produced only 1,711 permanent loan modifications.

Why doesn't Treasury release the number of trial modifications started, the redefault rates for trial modifications (by month started) and the number of permanent modifications?

Diani Olick at CNBC has more: Shadow Inventory Dwarfs Loan Mods
[W]e have no idea how successful those mods are now five months after the program really got cooking.

It's coming, that's what the folks at Treasury say.

They also say that a lot of borrowers got extensions on the trial period in order to get paperwork together to move on to permanent modifications. Insiders however tell me that a lot of that paperwork has to do with those so-called "stated-income" loans, where you just had to tell the lender what you make for a living, not actually prove it. In order to move to a permanent mod, you have to prove it, so now we get to find out how many of those "liar loans" were just that.
emphasis added
The size of the next wave of foreclosures depends on the success of the modification programs. And right now Treasury is leaving us in the dark ...

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