The Barack Obama administration’s Home Affordable Modification has produced 0.6 million active modifications — far short of original estimates. The administration Thursday said it is withholding HAMP payments to three servicers that are responsible for nearly half of the active modifications generated through the program.
Administration estimates in 2009 had HAMP modifications reaching as many as 5 million. Data released today from the Department of the Treasury indicated that 608,615 permanent modifications have been completed since the program was launched.
A separate announcement today from the Department of Housing and Urban Development indicated that HAMP incentive payments will be withheld from three mortgages servicers because they need substantial improvement “in identifying and contacting homeowners; homeowner evaluation and assistance; and program reporting, management and governance.”
The actions against the servicers — Bank of America, NA; J.P Morgan Chase Bank, NA; and Wells Fargo Bank, N.A. — were taken following new servicer assessments that summarize the performance of the top-10 HAMP servicers.
“Since the inception of the Making Home Affordable Program, Treasury has required participating servicers to take specific actions to improve their servicing processes,” the statement said.
Interestingly, without the three servicers, the administration’s program would have only produced 333,037 active modifications versus the more than 600,000 that were generated with the three lending giants.
The assessments, conducted mostly in the first quarter, also found similar problems with performance at Ocwen Loan Servicing LLC. However, HAMP payments weren’t withheld because many of the problems were tied to a portfolio Ocwen acquired during the testing period.
Ocwen acquired HomEq Servicing late last year from Barclays Bank PLC and announced in February the formation of Home Loan Servicing Solutions Ltd. which would invest in servicing rights inherited through the HomEq acquisition. This month, Ocwen announced plans to acquire Litton Loan Servicing LP from The Goldman Sachs Group Inc.
Litton, like Ocwen, is among the 10 biggest HAMP servicers.
