The US Treasury just released its latest "scorecard" on the state of the government's housing bailout. The numbers are still weak, compared to the overall picture.
In May, 32,398 borrowers got permanent modifications, bringing the total to 731,451, but nearly 98,000 modifications have already gone bad and been canceled. Treasury did put out some interesting new numbers on how many modifications involve principal forgiveness from the banks.
Close to 5,000 "active modifications" have a reduced principal balance of, on average, about $70,000, or 32 percent of the balance. About 16,000 more are in the trial period—kind of a pittance, when you look at the 1.6 million trial modifications started.
Banks tell me they are doing more principal reduction in their own proprietary modifications, but getting that data is, suffice it to say, difficult to obtain.
It is interesting to note that short sales are really ramping up. The Treasury's report now includes numbers on the Home Affordable Foreclosure Alternative program, which gives incentives to servicers and borrowers to do short sales and deeds in lieu of foreclosure. Close to 18,000 of these started, nearly all short sales, and this program is just a few months old.
So, where do we stand?
“The housing data in this month’s Scorecard paint a mixed picture of the housing market, despite growing evidence of progress in the broader economy,” said HUD Assistant Secretary Raphael Bostic.
“Last month we saw a slight uptick in home prices and a continued decline in mortgage defaults as our foreclosure prevention programs reach more borrowers upstream in the process. But we have much more work to do to reach the many households who still face trouble and to help the market recover. That is why this Administration continues to push for effective implementation of our recovery programs as we continue to help homeowners through this crisis.”
The government is still in play in the mortgage bailout, despite the comparatively low numbers and despite the lack of housing talk we've heard lately from the Administration. Last month, a Housing and Urban Development program mandated by the Dodd-Frank financial reform bill started taking applications.
It's a $1 billion emergency loan program for unemployed or underemployed borrowers. The response has been so huge that applicants will likely exceed the 30,000 borrowers the program can ultimately help. There may have to be a lottery or some kind of random selection process.
It just goes to show that no matter how much money the government throws at the problem, when it comes to the more than 6 million loans out there that are either delinquent or in the foreclosure process, it's just not nearly enough.Questions? Comments? RealtyCheck@cnbc.comAnd follow me on Twitter @Diana_Olick