Wells Fargo and Bank of America are playing catch-up with other loan servicers in implementing the Making Home Affordable loan modification program, according to the first public report on loan servicer performance from the Treasury Department.
Four major loan servicers — Saxon Mortgage Services Inc., Aurora Loan Services LLC, GMAC Mortgage Inc., and J.P. Morgan Chase — have begun trial loan modifications on at least 20 percent of loans they service that are 60 days or more delinquent and eligible for the Home Affordable Modification Program (HAMP), the report said.
Bank of America, which has the largest number of eligible 60-day-delinquent loans among loan servicers participating in the HAMP program — 796,000 — had started trial modifications on only 4 percent of those loans through July, the report said.
Wells Fargo, the third-largest servicer participating in the HAMP program, had initiated trial modifications on 6 percent of the 329,000 60-day-delinquent loans the Treasury Department said were HAMP-eligible.
As a whole, loan servicers participating in the program have started trial modifications on 9 percent of the 2.7 million 60-day-delinquent loans that the Treasury Department has identified as potentially eligible for HAMP, the report said.
Many other loans, including those not yet in default, are also eligible for the HAMP program. But the percentage of trial modifications initiated on 60-day-delinquent loans is a useful metric for comparing the performance of loan servicers, the Treasury Department said.
The performance of loan servicers has been "uneven," the Treasury Department said in a press release announcing the publication of the first in a series of monthly reports.
The Obama administration has asked companies to increase staffing, improve borrower response times and streamline the application process in an effort to implement 500,000 trial modifications by Nov. 1 (see story). …CONTINUED
The administration maintains that the current pace of modifications — more than 400,000 modification offers have been offered, and 230,000 trial modifications initiated — would still allow the HAMP program to achieve 3 million to 4 million modifications by Dec. 31, 2012, the target set when the program was announced in February.
A separate Home Affordable Refinance Program (HARP), which is intended to help as many as 5 million borrowers with loan-to-value ratios of up to 125 percent refinance loans owned or guaranteed by Fannie Mae and Freddie Mac, expires June 10, 2010 (see story).
Although Wellls Fargo and Bank of America have lagged the industry as a whole in the percentage of HAMP trial modifications initiated, they are closer to the industry average for trial modifications offered — an indication the companies are picking up the pace of modifications.
Bank of America, which includes Countrywide Home Loans Servicing, has offered trial modifications on 13 percent of HAMP-eligible 60-day-delinquent loans, compared with the 15 percent industry average, the report said. Wells Fargo has offered trial modifications on 12 percent of eligible 60-day-delinquent loans.
Other large loan servicers lagging behind the industry average included Wachovia Mortgage FSB, which had initiated trial modifications on 2 percent of about 63,000 eligible 60-day-delinquent loans, and National City Bank, which had initiated only a handful of loan modifications or modification offers through the end of July.
A total of 38 loan servicers have signed agreements to participate in the HAMP program, which offers $75 billion in incentives to loan servicers and borrowers who enter into loan modifications.
Another 2,300 loan servicers who handle loans owned by Fannie Mae and Freddie Mac are automatically participating in HAMP. Together, participating companies service about 85 percent of mortgages.
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