by Sorohan, Mike
The Obama Administration yesterday released the first report of its Making Home Affordable loan modification program, saying that participating servicers extended more than 400,000 modification offers and began more than 230,000 trial modifications.
Based on yesterday's statistics, the Administration said the program is on pace to help more than 3.4 million homeowners in the next three years. But the report also mildly criticized larger servicers, saying they could be doing more to initiate modifications.
The MHA program, authorized in March, provides $75 billion for “sustainable mortgage modifications” through the Home Affordable Modification Program, known as HAMP. Currently, 38 servicers have signed Servicer Participation Agreements to participate in the program, servicing numerous types of loans including Fannie Mae, Freddie Mac, private-label and portfolio. Additionally, 2,300 servicers that service Fannie Mae and Freddie Mac loans automatically participate in HAMP; together, SPA servicers and other represent 85 percent of the mortgage market.
The report also discloses performance on a servicer-by-servicer basis. On a volume basis, JP Morgan Chase Bank provided the highest number of both trial plan offers extended (117,259) and trial modifications started (79,304), representing 30 percent and 20 percent, respectively of its eligible loans 60 days or more delinquent. Bank of America extended 99,649 trial plans and started 27,985 modifications, representing 13 percent and 4 percent, respectively, of its eligible loans 60 or more days delinquent. CitiMortgage Inc. extended 38,673 (21 percent) trial plans and started 27,571 modifications (15 percent); Well Fargo Bank NA extended 38,673 (12 percent) trial plans and started 20,219 modifications (6 percent).
On a percentage basis, Nationstar Mortgage LLC extended 11,443 trial plans, representing 45 percent of its estimated eligible loans 60 or more days delinquent. Saxon Mortgage Services extended 30,817 trial plans, representing 37 percent of its delinquent loans.
Administration officials called servicer performance “uneven,” saying larger servicers need to initiate more modifications. Last month, Treasury Secretary Timothy Geithner and HUD Secretary Shaun Donovan called on participating servicers to “redouble” their efforts, asking them to implement a cumulative 500,000 trial modifications begun by Nov. 1.
Additionally, the Administration said it would develop “more exacting” metrics to measure the quality of borrower experience, such as average borrower wait time for inbound inquiries, completeness and accuracy of information provided applicants, and response time for completed applications. It has also asked the program compliance agent, Freddie Mac, to develop a “second look” process to audit MHA modification applications that have been declined on an ongoing basis.
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