While the federal government’s Home Affordable Modification Program (HAMP) has struggled with failed modifications, terrible press coverage and horrible conversion rates, HOPE NOW, a self-described “alliance between counselors, mortgage companies, investors and other mortgage participants” just released its 2010 loan modification data and it has completed 1.76 million loan modifications since the beginning of 2010. Of those 1.76 million loan mods, 512,712 were HAMP modifications. The rest were negotiated independently from the HAMP system.
These numbers are startling and problematic given the massive government funds poured in the HAMP program. Ultimately, mortgage servicers completed slightly more than twice as many modifications outside of the Obama administration’s HAMP program. According to HOPE NOW’s executive director, Faith Schwartz, “Borrowers are getting more loans modified through private plans because the programs offer more generous terms and have less stringent requirements than HAMP.” This means that there is more flexibility in the modification process, she explained, pointing out that HAMP needs to be more stringent because it is funded by taxpayer dollars.
However, it appears that steering clear of HAMP could be the way to go – particularly if your loan is with a major lender like Wells Fargo. Of that lender’s 621,621 modifications last year, 86 percent were performed and completed outside of HAMP. It should be noted, however, that HOPE NOW did not provide information on defaults on modifications.
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