It’s taken some time to get off the ground, but the Home Affordable Modification Program (HAMP) may finally be gaining some traction. According to a new report released yesterday by the U.S. Treasury Department, 910,000 homeowners have now received a permanent HAMP modification and 83 percent of eligible homeowners that signed on with HAMP since June 2010 have gotten permanent loan mods. That’s a huge step up from the beginning of 2010, although still a long way from the projected 4 million homeowners the administration hoped the program would help[1].

According to the report, the 910,000 loan modifications have resulted in “savings” on monthly mortgage payments of $9.9 billion so far. HUD assistant secretary Raphael Bostic calls the data promising, saying that “it’s clear we’ve made important progress in recovering from this housing crisis.” According to the same report, there are 891,542 additional homeowners out there who are eligible for and could benefit from HAMP assistance. Also of note is the number of principal reduction alternative (PRA) loans granted. Through November 2011, 38,243 permanent PRA modifications had been granted, reducing borrowers’ principal by a median $66,306.

In addition to HAMP successes, the Treasury also pointed out that the 2MP initiative, a second-lien modification program that debuted a year ago, is working on about 47 percent of all eligible loans[2]. Often secondary loans are stumbling blocks to successful primary-loan modifications because secondary lien-holders do not wish to write off the debt. 2MP allows servicers to either modify the second lien or, in some cases, “fully extinguish it.” Secondary liens qualify for 2MP if they have an unpaid principal balance of at least $5,000 and monthly payments of $100 or more before modification.

In spring of 2011, many people wanted HAMP eliminated entirely, including former members of the administration. Do you think that it was a good decision to stick with this program? Do you agree with Bostic that it is “clearly” aiding the housing recovery?

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