BofA defends HAMP performance

Bank of America is picking up the pace of loan modifications under the Home Affordable Modification Program (HAMP) and isn't lagging as far behind the industry as the latest numbers from the Treasury Department suggest, the company said today.

At the end of last month, Bank of America had made trial or permanent modifications on 14 percent of the estimated 1 million HAMP-eligible loans it's servicing that were delinquent by 60 days or more, the Treasury Department said in a report last week.

The industry average was 24 percent, and seven loan servicers have topped 30 percent, including CitiMortgage (43 percent), JP Morgan Chase (31 percent) and Wells Fargo (30 percent), the report said (see story).

Jack Schakett, Bank of America credit loss mitigation strategies executive, said that as the lender makes contact with the more than 1 million borrowers in its servicing portfolio that the Treasury Department has identified as HAMP-eligible, it's finding many are not.

Some are no longer owner-occupants, others are unemployed, and some already have affordable mortgage payments that are less than the HAMP target of 31 percent of their income, Schakett said in a conference call with reporters.

It's likely that only about 340,000 of the 1 million 60-day-delinquent mortgages Bank of America is servicing that the Treasury Department has identified as HAMP-eligible actually are, Schakett said.

Bank of America has offered trial loan modifications to 74 percent of that population, and started trial modifications on half of those loans, Schakett said, which compares favorably to the industry as a whole, he said. ...CONTINUED

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