Posted on Sunday, April 25, 2010
So far about 230,000 mortgages have been permanently modified. The median back end DTI is 61.3%, down from 77.5%. But that’s still too high, meaning many are still at risk of redefault. Hence the push for longer terms principal reductions and addressing firsts and seconds so homeowners can sustain affordable payments and rebuild equity. Recent FHA and HAMP programs enhancements announced March 26th addressing this may lay a framework for others but there is still concern over servicers self-interests not in line with investor and borrower interests. These write down programs are expected to be clarified in early fall. Forbearance for the unemployed will take about 2 months to see.
Over 60,500 trial modifications were converted to perms in March, a 15% increase over February, but 66,500 trials were cancelled. And new trials dropped by 15,000 in March from February. Treasury says this is due to new up front documentation requirements. About 108,000 trails need only borrower signatures to convert to perm.