While critics have pilloried the Obama Administration’s largest program to fight foreclosures for months, there is finally some good news, ever so slight, in Colorado.
Colorado in April showed the first month-over-month increase this year in the number of homeowners entering the required first step of the Home Affordable Modification Program. While it marks one of the few positive moves, it was only an increase of 22 homeowners from March to April entering the program, shows data released last Thursday.
242 Colorado homeowners helped in April
In April, some 1,619 Colorado homeowners entered the permanent modifications portion of the $75 billion HAMP. While that is a mere 1.4 percent increase from the 1,597 people who entered the program in March, it does buck a trend. Last year, only one month -December – showed an increase from the previous month, and the 1.2 percent increase from November was even more modest than the change from March to April. In April 2010, 8,932 Colorado homeowners were accepted into the program. However, that was before the U.S. Treasury instructed servicers to pre-qualify people before accepting them into the first-stage of HAMP, because so many of them were not being accepted into the permanent modification program. For many homeowners that was devastating because they had been pinning their hopes on the program for months and were in a worse financial situation than when they began. However, since June 2010, when the applicants were starting to be pre-screened, 70 percent of the trial modifications have been converted to permanent modifications.
In Colorado, 8,464 people entered the permanent modification portion of HAMP in April, compared with 8,222 in March. In other words, 242 Colorado homeowners in April were deemed qualified to have their mortgage rates lowered enough that it is expected to allow them to stay out of foreclosure.
Nationally, almost 700,00 homeowners have received permanent modifications, saving them more than $6.3 billion, since the program began in 2009. However, that is far short of the 3 million to 4 million the Obama Administration had hoped to help with HAMP. On the other hand, only a fraction of the $75 billion has been allocated to HAMP. Across the country, borrowers whose loans have been modified save a median of $526 each month, or 37 percent of their before-modification monthly housing payment.
The Obama Administration is turning up the heat on servicers – those responsible for collecting monthly mortgage payments, as well as determining which homeowners are accepted into HAMP. Starting in April, the Treasury is publishing quarterly assessments of the 10 largest program participants. For the first quarter of 2011, four servicers were deemed to need “substantial improvement” by the Treasury. The Treasury is withholding financial incentives from three servicers.
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