Tag: HAMP

  • Fannie/Freddie to Homeowners: Do Nothing and Help Will Arrive

    Posted by

    Katie Porter

    Housing Wire is reporting that Federal Housing Finance Agency, the conservator of Fannie Mae and Freddie Mac, has launched a new loan modification program. The program is a major departure from HAMP and HARP (thankfully!). It puts mortgage servicers in charge of delivering relief, instead of requiring homeowners to run down, chase, and exhaust themselves contacting their mortgage company.

    The basic details available so far are that the program will start this July 1 and end August 2015. It will be open to Fannie/Freddie homeowners who are 90 days or more delinquent on their mortgages. Homeowners will not have to submit proof of financial hardship or undergo extensive underwriting to be qualified for modifications.

    This "Streamlined Modification Initiative" needs a better name, better branding, and at least so far, better publicity. But overall, I am very encouraged that FHFA is adopting this kind of program. It's what I call a "push program," requiring the servicers to deliver relief. We've seen at least two servicers roll out similar push programs as part of the National Mortgage Settlement. Bank of America sent letters to over 100,000 homeowners stating that if the borrower literally did nothing that their second mortgage would be forgiven and released, and the debt reported to credit bureaus paid in full. Guess what, 99% of homeowners who got this letter got the relief. Similarly, JPMorgan Chase rolled out a Settlement "refinance" program that was actually a simple, no-doc, interest rate reduction for the life of the loan. Their consumer response rate was multiples of other institutions that required full documentation for their Settlement refinance programs. Both programs are innovative and leverage the servicers' resources, while reducing the onus on everyday families.

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  • Don’t Let Servicers Be Mortgage Relief Gatekeepers (Again)

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    Jean Braucher

    Thanks to Chris Mayer for taking the time to comment on my earlier posting and for providing more information about his mortgage relief and stimulus proposal (with Glenn Hubbard). First, let’s focus on his statement that, “Servicers must run any program, but ours would be directed by the Treasury Department and would require compliance.”  HAMP, the administration’s troubled mortgage modification program, is run by the Treasury Department and theoretically requires compliance by participating servicers, but that is very different from actual compliance. Servicers, as I noted before, have done “a terrible job” under HAMP, to quote Secretary Geithner, who nonetheless has refrained from invoking enforcement powers. Debtors frequently experience a run-around trying to get a HAMP modification.

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  • Mortgage Relief for All; But Who’s Paying??

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    Jean Braucher

    Glenn Hubbard is the dean of the Columbia Business School as well as the former chairman of the Council of Economic Advisors under President George W. Bush. That resume is what makes so puzzling his op ed (with a Columbia colleague, Chris Mayer) in yesterday’s Sunday NY Times: Op-Ed Contributors:  How Underwater Mortgages Can Float the Economy. Maybe I shouldn’t be surprised that their proposal seems unhinged from reality.

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  • HAMP Update: Still Ineffective

    Posted by

    Adam Levitin

    Another HAMP data report is out.  Same old story–HAMP isn't doing very much for very many people. We're up to 398,021 permanent modifications. That's out of around 1.7 million HAMP eligible mortgages and 5.7 million mortgages that are 60+ days delinquent (the June report doesn't contain the updated eligibility waterfall, unfortunately). Drop in the bucket. The trial modification numbers are a bit better, at 1.28 million, but the number of new trials each month seems to be flattening out–just 15,153 new trials started in June.  That means new permanent modifications will also start to taper off in a few months. And there are an awful lot of failed trial modifications, as Felix Salmon (commenting on the May numbers) has noted. 

    I've long been skeptical about HAMP as doing too little at too high a cost, and I think the numbers bear out that skepticism. How much evidence has to amass about the failure of HAMP to provide effective foreclosure relief before the program is canned and the policy debate is refocused on providing meaningful foreclosure relief? 

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  • Foreclosure Update: the Good and the Bad

    Posted by

    Adam Levitin

    Here's the good news: foreclosure starts in Q1 2010 fell a bit, to 691,017, their lowest number since 2008, according to HOPE Now. It's encouraging to see the numbers fall, rather than rise, but they are still at extremely high levels.  

    Here's the bad news: completed foreclosure sales in Q1 2010 rose significantly to 291,381, their highest number in US history. Some of this might be a matter of reporting over quarters–the Q4 2009 numbers were down, perhaps because of Yuletide forbearance. But the clear message from these numbers is that we are nowhere close to being out of the woods on foreclosures.

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