The Treasury Department released the latest figures today for its $75 billion flagship homeowner relief program, and the figures are—you guessed it—still abysmal. Through January the Home Affordable Modification Program has resulted in around 116,000 permanent modifications, 76,000 offers of permanent modifications, and more than 1 million homeowners beginning trial modifications.
Now, an interpretation. First off, the statistic that really matters here is that first number—116,000—the number of permanent mods. It's not much at all. By comparison, 2.8 million households got foreclosure notices in 2009, shattering the previous record and foretelling more pain in the housing sector in 2010. Now while HAMP wasn't created to address all kinds of foreclosures (which is arguably one of its flaws), a program with $75 billion in taxpayer funds behind it should do far more than help a meager 116,000 homeowners almost a year later.
Then there's that "trial modifications" figure. Trial modifications are only a few months in duration, are hardly a guarantee for a permanent modification, and do very little, if anything at all, to lessen the burden on beleagured homeowners. One homeowner, for instance, told me that after wrangling with her servicer, Saxon Mortgage Services, for months to get into HAMP, she finally got a modification; to her dismay, though, her new payments were a measly $40 less than her original, unaffordable mortgage. The reason why? Saxon claimed this homeowner had a sister who was giving her more than $1,000 a month and that skewed her income calculations. The rub: This homeowner was an only child.
It's these kinds of errors and general confusion that continue to plague HAMP, as these latest numbers show. As for the Treasury's take on HAMP's progress—"With nearly one million homeowners paying less each month and the number of permanent modifications steadily rising, HAMP is doing the job it was designed to do," says Phyllis Caldwell, head of the Treasury's Homeownership Preservation Office—that's just complete and utter spin. One million homeowners are not paying less each month—maybe for a short period, but even that's questionable—and HAMP is not doing its job by any stretch of the imagination. Far from it.