Industry NewsMortgage

One-third of HAMP temporary loan mods canceled

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More than a third of the 1.24 million trial loan modifications made through May under the Home Affordable Modification program (HAMP) have been canceled, although most borrowers exiting the program end up in other loan modifications or become current on their loans, the Obama administration reported Monday.Cancellations of temporary loan modifications are on the rise as servicers comply with guidance from the Treasury Department to make decisions on "aged" trials. More than 70 percent of the trial modifications canceled in April were at least six months old, the report said. Borrowers in temporary loan modifications can qualify for permanent modifications after making their trial payments for three months. But some may lose their trial loan modifications because their mortgage payments are already less than the 31 percent of income stipulated by the program, or because they missed payments or had documentation that could not be verified.About half of borrowers who have had th...