Posted on Sunday, October 11, 2009
Less than 3 in 10 mortgages that were modified by servicers in Q1 2008 are still current according to the Office of the Comptroller of the Currency. As mod age the chance of default increases significantly. 48.2% of those modified in Q4 2008 are current. 36% of those modified in Q1 2009 are delinquent. Mods increased by 172% during Q1 2009 over Q1 2008. New mods increased by 55% during Q1 2009 compared to Q1 2008. FNMA and Freddie are completing deeper mods now. More than half resulted in 20% reduction in payments compared to closer to 2% before. Default rate is much higher when payments are not reduced by at least 10%. 71% of mods rely on interest rate reductions.
The amount to assist one homeowner under HAMP is about $16,000. The servicers are paid $4500. The borrower is paid about $5000. The investor about $6500. Total $16,000. Some say the government is off by the number of people funding is able to help by about 3 million. Because HAMP has brought so many out looking for help, those who really need it are finding it tougher. The number of homeowners needing assistance is about 80 million.