A new government report may be viewed as a big pat on the back for its loan modification program, with data showing that government efforts to stall foreclosures are faring better than some private market solutions.
The government report comes from the U.S. Office of the Comptroller of the Currency and the Office of Thrift Supervision.
In it, study researchers conclude that fewer than 17% of home loans modified under President Obama’s Home Affordable Modification Program had missed at least one monthly payment and about 8% had fallen behind on two payments. The numbers cover the first quarter of 2010, the Office of the Comptroller of the Currency said.
The study also concludes that the government numbers are better than the ones coming out of the private sector. According to the report, about 25% of privately-managed loan modification programs would up with the homeowner 30 days late on their mortgage payment. In addition, about 10% were past due beyond 60 days.
Some other interesting conclusions from the government report:
- HAMP is targeting two strategies to get homeowners out of trouble: reducing interest rates on loan payments to as low as 2%; and by extending loan terms to as long as 40 years.
- The U.S. government says that borrowers who complete the HAMP process are saving $514 a month, on average.
- About 33% of the 1.2 million mortgage-holders in the HAMP program have since dropped out of the program.
- About 340,000 mortgage-holders (27% of all enrollees) have garnered permanent loan modifications, and are currently keeping up with payments.