HAMP Servicers Continue to Improve on Assessments: Housing Scorecard

ThernU.S. Department of Housing and Urban Development (HUD) and the U.S. Departmentrnof the Treasury today released the February edition of the ObamarnAdministration’s Housing Scorecard.  ThernScorecard is a summary of housing data from various sources such as thernS&P/Case-Shiller house price indices, the National Association of Realtors®rnexisting home sales report, Census data, and RealtyTrac foreclosurerninformation.  Most of the information hasrnalready been covered by MND. </p

ThernScorecard is accompanied with the monthly report on the various programsrnoperated by the Making Home Affordable (MHA)  Program including the Home AffordablernModification Program (HAMP), the Second Lien Modification Program (2MP), and<bPrincipal Reduction Alternatives (PRA). rnThe current report contains program activity through the end of Januaryrn2012.  The February report also includesrnthe Fourth Quarter 2012 assessments of the largest mortgage servicers participatingrnin the program.  </p

For the fourth quarter of 2012, two servicers were found tornneed only minor improvement in the areas reviewed for program performance,rnwhile seven servicers were found to need moderate improvement.  The two servicers needing minor improvementrnwere GMAC Mortgage andrnOneWest Bank.  Those needing moderaternimprovement were Bank of America, CitiMortgage, Homeward Residential,  JPMorgan Chase Bank, Ocwen Loan Servicing, SelectrnPortfolio Servicing, and Wells Fargo Bank.  </p

MHA saysrnthat while servicer performance in any particular category can fluctuate, inrngeneral servicers continue to show improvement in program implementation andrnhighlighted the progress in two areas. rnIn one, the “second look disagree” category in which reflects the raternat which the Treasury Department’s program reviews disagree with the servicersrndecision to find a homeowner ineligible for assistance the disagree rate forrnthe top servicers was below two percent.</p

MHArnalso found that servicers are continuing to accurately calculate homeownerrnincome, finding the average income calculation error rate decreased from thernprevious quarter and three servicers had a zero percent error rate.  </p

Betweenrnthe end of December and the end of January MHA’s activity included therninitiation of 24,106 first lien modifications, 11,654 of which were throughrnHAMP, and 14,858 HAMP permanent modifications. The remainder of the modifications initiatedrnwere standard modifications by the government sponsored enterprises Freddie Macrnand Fannie Mae.  </p

Thern2MP program initiated 2,165 second lien modifications and the HAFA programrnconcluded 13,322 transactions, the vast majority of which were shortrnsales.  There were also 811 forbearancernplans started through UP.  </p

Sincernthe implementation of MHA programs there have been 1,264,711 first lienrnmodifications initiated, 1,151,340 through HAMP.  The second lien modification program hasrninitiated 105,437 modifications and the UP plan 30,525 forbearance plans.  HAFA has completed foreclosure alternativerntransactions for 114,417 borrowers.</p

Thern$25 billion National Mortgage Settlement in February 2012 has caused servicersrnto increase their use of principal reductions in their loan modifications.  Sixty-nine percent of non-GSE modificationsrnstarted in January included principal reduction but only 55 percent were donernthrough the HAMP PRA) which offers servicers incentives for participating.  MHA says that principal reductions grantedrnoutside of the HAMP PRA program since February 2012 are likely attributable tornthe settlement.

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