Friday, November 19, 2010

Disposition of Canceled HAMP Trial Modifications

by Bill McBride on 11/19/2010 03:47:00 PM

Treasury released the October HAMP statistics last night.

There is some interesting data on the disposition of canceled HAMP trial modifications. The general view was that a majority of these borrowers would lose their homes in foreclosure or through a short sale. That hasn't happened yet.

The statistics, from the 8 largest servicers (about 80% of HAMP), show that most of these borrowers are in alternative modification programs or have cured the default (current of loan paid off).

HAMP Dispostion of canceled trial mods Click on graph for larger image in new window.

This graph shows the disposition of canceled HAMP trial modifications (in percentages). This represents 552 thousand canceled trial modifications as of September.

Only 3.9% of borrowers have lost their homes in foreclosure, and another 8.5% have lost their homes through a short sale or deed-in-lieu of foreclosure.

About 13% of borrowers are in the foreclosure process, and another 1.9% in bankruptcy.

So what has happened to the borrowers in all of those canceled trials? The largest percentage of borrowers are in alternative modification programs (lender programs). The next largest group is in "action pending". Some have paid off their loans (probably sold their homes), and another 7.7% have managed to become current.

So the number of foreclosures was lower than many expected, although many of the borrowers in the alternative modification programs will probably redefault (and the action pending group might also results in a number of foreclosures). Hopefully HAMP will keep updating this table.