CNN reported today that the number of mortgage loan modifications, and particularly the number of permanent loan modifications, increased significantly in December. Despite the fact that the number of permanent modifications since the HAMP began more than doubled in December alone, the all number of permanent modifications is still at only 7.4% of all modifications that have been started. In addition, more than half of all people who are granted trial modifications end up being denied permanent modifications. In addition, foreclosures still outpace the number of loan modifications.
Even the best of the loan servicers that participate in the HAMP has only placed 47% of its eligible borrowers into trial modifications. The worst of the loan servicers has placed only 19% into trial modifications. If the percentages continue at the current trend, more than half of those borrowers in the trial modifications will not receive permanent modifications. As a result, the current percentages for permanent modifications are alarming. Of the largest mortgage loan servicers in the country, the percentage of eligible borrowers who have received permanent modifications ranges from 2.41% to as little as 1.68%.
If you are eligible for loan modification under the HAMP, you must be diligent in keeping in touch with your loan servicer, completing all of the paperwork required by the servicer, and staying on top of the process to ensure that the servicer follows through. But, as I have mentioned in earlier posts, you need to make sure you can afford the modified payments. If not, the modification may only be delaying the bigger problem of foreclosure.
