They represent only a small percentage of troubled borrowers, but homeowners granted permanent loan modifications under the federal Making Home Affordable Modification program have seen significant decreases in their monthly payments and debt-to-income ratios, according to the latest HAMP program report.

About one in four of the 3.3 million borrowers the Treasury Department estimates are 60 days or more behind on their mortgage payment and eligible for HAMP were enrolled in trial or permanent HAMP loan modifications at the end of December, the report said.

Active trial and permanent loan modifications increased more than 75 percent from the third quarter to the fourth, to 853,696, the report said. Of those modifications, only 66,465 were permanent, although loan servicers had approved another 46,056 permanent modfications pending borrower acceptance.

Borrowers granted trial loan modifications under HAMP must continue to make reduced payments for three months in order to qualify for "permanent" modifications, which provide fixed monthly payments for five years.

The median monthly payment among borrowers receiving permanent loan modifications dropped from $1,419 a month to $830, and reduced the median debt-to-income ratio from 45 percent to 31 percent, the report said.

According to the report, the top-performing HAMP loan servicers included CitiMortgage, which had active loan modifications in place on 47 percent of eligible 60-day-plus delinquent loans at the end of the year, JP Morgan Chase (36 percent) and Wells Fargo (34 percent).

The nation’s largest loan servicer, Bank of America, continued to lag behind the industry average of 25 percent, with active modifications in place on 19 percent of eligible 60-day-plus delinquent loans, the report said.

Bank of America has defended its HAMP performance, saying many of the more than 1 million delinquent mortgages that it services that have been identified by the Treasury Department as HAMP-eligible are not (see story).

***

What’s your opinion? Leave your comments below or send a letter to the editor.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription