Friday, August 20, 2010

HAMP data for July

by Bill McBride on 8/20/2010 11:43:00 AM

From Treasury: HAMP Servicer Performance Report Through July 2010

And here is the HUD Housing Scorecard.

HAMP Activity Click on table for larger image in new window.

About 422 thousand modifications are now "permanent" - up from 389 thousand last month - and 617 thousand trial modifications have been cancelled - up sharply from 521 thousand last month.

According to HAMP, there are 255,934 "active trials", down from 364,077 last month. There is still a large number of borrowers in limbo since only 165 thousand trials were started over the last 5 months. I expect another large number of cancellations in August.

HAMP Trials The second graph shows the cumulative HAMP trial programs started.

Notice that the pace of new trial modifications has slowed sharply from over 150,000 in September to under 17,00 in July. The program is winding down ...

Debt-to-income ratios

If we look at the HAMP program stats (see page 3), the median front end DTI (debt to income) before modification was 44.8% - the same as last month. And the back end DTI was an astounding 79.7 (about the same as last month).

Think about that for a second: for the median borrower, about 80% of the borrower's income went to servicing debt. And the median is 63.5% after the modification.

These borrowers are still up to their eyeballs in debt after the modification.

Summary:

  • Another large number of trial programs were cancelled. This will mean more foreclosures (or short sales) in the near future.
  • A large number of borrowers are still in modification limbo, so there will probably be more cancellations coming.
  • The program is winding down quickly.
  • The borrowers DTI characteristics are poor - suggesting a high redefault rate over the next year or two.

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