While a major player in the loan modification market expects an uptick in loan restructurings when employment improves, other industry participants say the relevance of the government's HAMP program is decreasing.
Speaking at SourceMedia's Second Annual Best Practices in Loss Mitigation Conference in Dallas, Citigroup's senior vice president of loss mitigation, Bryan Bolton, said borrowers who qualified and kept their modified loan current during tough economic times may need another mortgage review when they find new employment "say six to eight months from now." Changes in their income level that require a new modification will result in "an uptick in modifications," he said.
Currently, however, there is a significant growth in nongovernment mods which do not get nearly as much press as HAMP ones, said Katie Brewer, vice president of loss mitigation for Residential Capital Corp., a GMAC company. Brewer believes non-HAMP activity will increase.
Various panelists at the show voiced concerns that it can be difficult implementing HAMP because additional changes are coming to the program. Some believe this may cause seller/servicers to focus on private sector restructurings.
One panelist, Ivy Zelman, CEO of Zelman & Associates, went so far as to call HAMP "a dying program" that "is loosing steam."
Nonetheless, there appears to be a consensus that HAMP has driven-and will continue to spur-innovation in the mortgage servicing marketplace as lenders figure out what it is worth to them. By requiring more documentation and front-end borrower information gathering, HAMP has helped decrease recidivism rates and continues to bring borrowers to the negotiating table.
