U.S. lenders permanently modified 31,382 of the 4 million mortgages targeted for loan relief under the Obama administration’s main foreclosure prevention plan through last month, the Treasury Department said today.
GMAC Mortgage Inc. completed 7,111 payment plans, more than any other servicer, the Treasury said today in a report. GMAC was followed by JPMorgan Chase & Co., which completed 4,302 modifications, and Ocwen Financial Corp. with 4,252.
More than 697,000 trial modifications had been started through the Making Home Affordable Program through November, up from about 650,994 in October, according to the department. Today was the first time the Treasury disclosed how few of those initial revisions had been converted to permanent mortgage relief, part of an effort begun last week to push lenders publicly for more action.
“Our challenge now is to keep the pressure on,” William Apgar, senior adviser for mortgage finance to the Housing and Urban Development Department, said today in a statement.
The three-year housing slump has wiped at least 28 percent of home values nationwide, government and industry data show. Almost 23 percent of homeowners in the third quarter owed more than their properties are worth, according to First American Core Logic, a real-estate data company in Santa Ana, California.
A record 7.9 million U.S. homeowners fell behind on their mortgages in the third quarter, according to data from the Mortgage Bankers Association.
Bank of America Corp., the nation’s largest mortgage company, had 98 permanent modifications through November, among the fewest in the program. Citigroup Inc. converted Protected content into permanent plans, and Morgan Stanley’s Saxon Mortgage Services completed 42 modifications.
Fewer than 1.5 million of the 3.2 million homeowners estimated as eligible for mortgage relief by the Treasury actually qualify, Herb Allison, the Treasury’s assistant secretary for financial stability, told the House Financial Services Committee on Dec. 8.
The program was originally described as helping as many as 4 million borrowers at risk of foreclosure to negotiate lower payments by lengthening loan terms, reducing interest rates and making other changes to mortgage contracts.
Amherst Securities Group LP’s Laurie Goodman told Congress Dec. 8 that the loan-modification program is “destined to fail” because it doesn’t confront the real problem of negative home equity that is driving foreclosures.
“If policies continue to kick the can down the road -- working with a modification problem that does not address negative equity -- delinquencies will continue to spiral with no end in sight,” Goodman said.