Mortgage servicers signed off on 27,840 new permanent HAMP modifications in September, down nearly 17% from the previous month, and a sign that the White House's signature foreclosure prevention program is losing steam.
The Treasury Department's latest update on the Home Affordable Modification Program shows there are 466,708 borrowers in permanent modifications, an increase of 17,770 from August.
Treasury says 35,300 borrowers were qualified to enter the three-month payments trials in September, up from 26,600 in August.
Borrowers that complete the payment trials become eligible for a permanent modification, which can reduce their monthly payments to 31% of income.
However, the number of struggling borrowers in active trials fell to 173,600 in September, from 202,500 in August.
The TARP Inspector general is concerned that the intake is too low, considering the number of defaulted loans and foreclosure notices nationwide.
The level of new trials signals that the "anemic pace of permanent modifications may only get even worst," IG Neil Barofsky says in a new report to Congress on the Troubled Asset Recovery Program.
The September HAMP report includes new figures on the performance of HAMP modifications. Of the 152,800 loan mods completed in the first quarter of 2010, Treasury reported that 9.8% are 60-day or more delinquent after 6 months and 5.4% are 90-days or more past due after 6 months.
Of the HAMP 56,000 modifications completed in the second half of 2009, the 60-day or more delinquency rate is 15.6% after nine months, and 11% are 90-days or more past due.
Since the HAMP program began in the summer of 2009, nearly 29,000 borrowers in permanent mods have defaulted and 400 have paid off their loan.
