TOP 5 IN REAL ESTATE, December 2009—(MCT)—Just 4% of delinquent borrowers who started trial mortgage modifications under the Obama administration’s housing plan have had those more affordable loan terms made permanent, the Treasury Department said Thursday.
The monthly progress report on the government’s Making Home Affordable modification program shows that mortgage servicers had started 759,058 trial periods with consumers nationally by the end of November. More than 697,000 of them were considered active trial modifications and 31,382 were permanent loan adjustments.
This is the first month that the Treasury Department has required mortgage servicers to break out the number of permanent modifications, part of its effort at transparency as it pressures lenders to move more borrowers into permanently affordable loan terms. The data shows while the number of trial modifications is increasing, permanent conversions to more affordable loan terms is running far behind.
Bank of America, which has more than 1 million mortgage loans that are at least 60 days past due and eligible for the program, said it has 156,864 homeowners in trial modifications but only 98 borrowers have received permanent modifications.
Of JPMorgan Chase Bank’s 448,815 delinquent, eligible mortgages, 136,686 customers are in active trial modifications and 4,302 have received permanent ones. Wells Fargo Bank had 30 % of its customers in modifications, including 96,137 customers in the trial period and 3,537 in permanent modifications. At CitiMortgage, 100,124 of its 233,924 delinquent borrowers were in trial modifications and 271 received permanent modifications.
“Our challenge now is to keep the pressure on,” said William Apgar, HUD senior advisor for mortgage finance, in a statement accompanying the data. “HUD-approved counselors are working with borrowers to ensure they are doing their part to transition into sustainable permanent modifications and we will ensure that servicers convert as many of those modifications by the end of the year as scheduled as they are scheduled to.”
The monthly accounting comes as two other reports issued Thursday paint a troubling picture of homeownership troubles in Illinois. Some 9.41 % of mortgages in the Chicago area were 90 days or more delinquent in October, compared with a delinquency rate of 5.02 % in October 2008, according to data provider First American CoreLogic.
Separately, Web site RealtyTrac said Illinois’ foreclosure filings in November were 108 % higher than a year ago, and more than 8,500 homeowners received default notices last month.
(c) 2009, Chicago Tribune.