The latest report on the Obama administration foreclosure relief plan shows continuing momentum with some 650,000 borrowers having received a trial loan modification.
“The program is having a pronounced impact in areas particularly hard hit by the housing crisis," said Treasury Assistant Secretary Michael S. Barr in a statement. "We’re reaching borrowers at a larger scale than any other modification program to date, but there is still much more work to be done.”
Though the program, known as Making Home Affordable, got off to a slow start in the late spring, it has shown marked improvement in recent months, passing the 500,000-mark in early October.
When the massive $75 billion program was first outlined in late February, the White House said it hoped to modify 3-4 million mortgages in two years, which would mean 375,000 to 500 million a quarter. It has since adjusted that to a three-year goal.
In all, some 920,000 borrowers have been made modification offers.
For the first time, the report includes state-by-state data. California ranked No. 1 with almost 135,000 modifications. Florida was second with more than 82,000. Both states are among the top ten with foreclosure rates.
Some six dozen firms that service loans are now participating, including such industry giants (or their subsidiaries) as JPMorgan Chase , Citgroup, Wells Fargo , Bank of Americaand Goldman Sachs .
In all, the government hopes to assist as many as 7 million to 9 million needy homeowners, through loan refinancing or modification to prevent foreclosures. About 85 percent of the estimated 55 million outstanding mortgages are covered under the program.
Foreclosures continue to run at a record pace. But what was once the plague of unconventional mortgages—such as subprime and no-documentation loans—synonymous with the easy money days of the credit bubble is now the stuff of prime loans held by more creditworthy borrowers who are losing their jobs to the recession and thus becoming delinquent on their payments.
The October report from the Treasury Dept. shows that Citigroup's mortgage unit has the highest participation rate--40 percent--of the major banks. BofA has the lowest--14 percent--which is all the more significant because it has the largest number of mortgages eligible under the plan--about 991,000. JPMorgan Chase, which has the second-most eligible mortgages, had a 32-percent rate.
Saxon Mortgage Services, a unit of Goldman, ranked No.1 overall, with a 44-percent participation rate.
The government data does not yet include redefault rates.