Bank of America completed more permanent Home Affordable Modification Program (HAMP) loan modifications in April than CitiMortgage, JPMorgan Chase, and Wells Fargo combined.
A new tally of HAMP released by the Treasury Department showed that BofA completed 23,500 HAMP modifications, compared to 8050 for Chase, 6100 for CitiMortgage and 6080 by Wells Fargo. Overall, HAMP servicers completed 68,300 permanent modifications in April, compared to 60,600 in the previous month.
Roughly 97,000 permanent modifications are pending that have not yet been signed by borrowers. Over the past several quarters, Treasury has pressured servicers to expedite the approval process which has dramatically forced more homeowners out of the payment trials. Overall, 277,640 borrowers have dropped out of the HAMP payment trials, including 122,170 in April.
Herb Allison, Treasury assistant secretary for financial stability, noted that many of the trials were started based on the borrower’s stated income — but servicers have had a hard time verifying such information.
Now HAMP servicers are requiring borrowers to verify their income upfront before starting the three-month payment trials. “We expect a much lower rate of cancellations going forward,” Allison said.
The Association of Mortgage Investors (AMI) noted that the number of homeowners who have failed a trial modification is nearly as large as the 295,350 active permanent modifications. AMI has been critical of the HAMP’s reliance on interest rate and term modifications. It supports Treasury’s new emphasis on principal reductions of first and second mortgages.
