Some Mortgage Servicers Need Improvement -Housing Scorecard

The Departments of Housing and Urban Development andrnTreasury issued their joint Housing Scorecard on Monday.  The Scorecard summarizes information on homernsales, mortgage originations, delinquencies and foreclosures, home prices, loanrnmodifications, and other housing related data, most of which is covered byrnMortgage News Daily as it is released from its original sources. </p

The Scorecard this month makes note of thernNeighborhood Stabilization Program which it said has completed 28,000 units ofrnnew or rehabilitated housing through its grantees through the end of the thirdrnquarter.  Direct assistance tornhomeowners reached the 10,500 mark.</p

The Scorecard includes by reference the monthlyrnreport of the Making Home Affordable or MHA Program which is the umbrella underrnwhich most of the administration’s foreclosure prevention initiativesrnoperate.  Chief among these is the HomernAffordable Modification Program (HAMP) which modifies first lien loans for bothrnprivate investors and the government sponsored enterprises Freddie Mac andrnFannie Mae.</p

HAMP servicers initiated 13,655 trial modificationrnplans in October, bringing the total since the program began in the spring ofrn2009 to 2.12 million.  Since thernSeptember report 16,383 trial modifications were converted to permanent status,rnbringing permanent modifications to a total of 1.29 million.  Of those 917,138 modifications are stillrnactive.</p

The Home Affordable Foreclosure Alternatives (HAFA)rnprogram has assisted 237,687 homeowners exit homeownership without undergoing arnforeclosure.  Short sales have accountedrnfor 221,886 of those actions and 15,801 were completed through a deed in lieurnof foreclosure.</p

The Second Lien Modification Program (2MP) hasrninitiated 121,252 second lien modifications and 77,713 are active.  Full lien extinguishments, at a median amountrnof $61,242 have been completed for 31,119 homeowners and partialrnextinguishments at a median of $10,116 have been completed for 9,507.</p

The November MHA report also contains the results ofrnthe third quarter Servicer Assessments. rnSince the beginning of MHA Treasury has required participating servicers to take specificrnactions to improve their processes through ongoing program reviews and the Assessmentsrnsummarize performance in three categories of program implementation:rnidentifying and contacting homeowners; homeowner evaluation and assistance; andrnprogram management and reporting.</p

The Assessment has been enhanced forrnthe third quarter to present new compliance metrics and benchmarks.  The report says these changes will providernadditional insight into the impact of servicer performance on the borrower’srnexperience, allow for trending analysis of all compliance metrics and fosterrnfurther improvement in servicer performance by tightening performancernbenchmarks.  In addition to tighteningrnbenchmarks for existing compliance metrics and removing three existing metricsrnthe changes include the addition of three new ones such as timely assignment ofrna single point of contact. </p

Three servicers were found to needrnminor improvement, three servicers were found to need moderate improvement andrnone servicer, Citi, was found to need substantial improvement. All servicers willrnneed to continue to demonstrate progress in areas identified in programrnreviews. Although this quarter’s results indicate one servicer needsrnsubstantial improvement, on average servicer performance has improved since therninception of the Servicer Assessment reports. This is evidenced by anrnaverage income calculation error rate of 0.8 percent for this quarter.</p

 “The standards set by thernMaking Home Affordable program have transformed the mortgage servicingrnindustry, as have our quarterly servicer assessments,” said Treasury DeputyrnAssistant Secretary Tim Bowler. “While the country as a whole has made significantrnprogress, there is still room for improvement for servicers and the Treasury isrncommitted to applying pressure on the mortgage servicing industry to improvernservicer behavior. Although the housing market has largely recovered, there arernstill homeowners struggling and it is key that we continue to help them.”

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