HAMP Mods Off 20% in November, but Remain Key Tool
Foreclosure starts and REO sales keep trending down but Hope Now servicers continue to do 13,000 to 16,000 HAMP modifications a month regardless of the improvements in the housing market.
The latest Hope Now report shows servicers completed 44,320 loan modifications in November and 13,000 met the parameters of Treasury’s Home Affordable Modification Program. Overall, mods were down 12% from October. HAMP mods were down roughly 20%.
Back in November 2012, the servicers completed 77,340 loan modifications including 15,400 HAMP mods. It seems the HAMP program just keep rolling along.
Meanwhile, a new Hope Now report shows that servicers initiated 84,240 foreclosure starts in November compared to 120,000 a year ago.
And short sales have really fallen off. Hope Now servicers participated in 14,780 short sales in November compared to nearly 33,000 a year ago.
In a recent speech, a special housing finance advisor to Treasury secretary Jack Lew called on Congress to extend the Mortgage Forgiveness Debt Relief Act for another year. This tax provision ensures that distressed borrowers who benefit from a principal reduction as part of a mortgage modification, short sale, or deed-in-lieu of foreclosure don’t have to pay taxes on the forgiven principal.
“Failing to extend this provision could force struggling families to settle for a less effective mortgage modification, or choose foreclosure over better alternatives for their families and their community,” said Treasury advisor Michael Stegman. He spoke at a securitization conference in Las Vegas on Wednesday.