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New Numbers on Performance of HAMP Loans Show Mostly Good News for Borrowers

May 12, 2011

Our Claremont foreclosure defense lawyers have kept an eye on the Home Affordable Modification Program because we work every day with people who are participating in it or would like to. In fact, one of our most active practices is suing lenders that deny HAMP modifications, or declined to make temporary modifications permanent, even though the borrower has met all of the necessary standards. So we were interested in the HAMP performance numbers for March, released in early May by the Treasury Department. The department's numbers continue to show underperformance compared to the President's original ambitions for the program. But the new statistics also show that more borrowers are getting permanent modifications.

The March 2011 numbers mark two years since HAMP was launched in March of 2009. In that time, HousingWire reported May 6, the program has seen 1.8 million trial modifications, 670,000 permanent modifications and 751,000 cancellations. This March, the Atlantic reported, the bad news is that trial modifications are at their historic lowest at just 22,000. However, permanent modifications are seeing an increase at 36,432. Even better, cancellations -- which can be triggered by borrower or lender performance issues -- are down to 12,000, the fewest in more than a year. The Atlantic observed that re-default rates seem to be dropping as HAMP ages, possibly because of the economic rebound.

As Westminster foreclosure defense attorneys, we're cautiously optimistic about this. As the Atlantic notes, an important test is coming for people who have had a modification for more than a year, because their interest rates may increase as their loans age. But it also notes that one-year re-default rates of 15 to 20 percent, which HAMP is showing, are not that dissimilar from the rates expected in private modification programs. That matters because HAMP has been widely derided as a failure, and this data suggests that it can succeed if it's given a chance. In our experience, the problems with HAMP have less to do with poor design than lack of enthusiasm from loan servicers, who are still not held accountable for their widespread and flagrant violations of HAMP rules.

If you're a victim of that kind of violation, you should call Howard Law PC to discuss your legal options. All of the major loan servicers have agreed to participate in HAMP, but as borrowers know, they don't seem terribly interested in actually granting loan modifications. Like all businesses, loan servicers want to maximize their income -- and as a Federal Reserve report pointed out, they can do that most effectively by NOT granting modifications. Instead, servicers draw out the foreclosure process, continuing to squeeze payments, late fees and fines from borrowers while claiming to have repeatedly lost paperwork or need just one more document. Our San Juan Capistrano foreclosure defense lawyers help clients sue for an honest answer and fair dealing whenever there are violations of the law or of HAMP rules.

Howard Law offers free, confidential case evaluations, so you can talk to us about your case and your options at no cost or obligation. To set up a meeting, send us a message online or call 1-800-872-5925 today.