For the first time, today, the U.S. Department of Treasury is releasing the number of trial mortgage modifications in its $75 billion Home Affordable Modification Programthat went permanent.
These would be considered successful mortgage modifications, where the borrower paid the new lower payment for at least three months and submitted all the paperwork (income verification, tax returns, etc.) required and that paperwork was acceptable.
We got a lot of numbers, so I want to put this all in perspective:
So far the 78 banks and servicers in the HAMP, which represent 85 percent of the total mortgage market, have just over 3 million loans on their books that are at least 60 days past due. So they sent out notices to those 3 million borrowers requesting more information.
A lot of those borrowers (as high as 50 percent) didn't respond, according to the banks. Some don't even live in the houses anymore. Gone.
Of those that did respond, just over a million had at least the verbally stated income to qualify for a modification under the program. Others were either not owner-occupants, didn't have the income level, or were unemployed. So 1,032,837 were offered modifications. But only 759,058 modifications were started. Why? Because a lot of the borrowers just didn't want them. They would rather try to sell the house or go into foreclosure and walk away. Remember, some borrowers are so underwater on their loans, that they will never see equity again, so why bother making any modification payment, even if it is affordable.