After some initial bumps due to mistakes by loan servicers, HAMP — the Home Affordable Modification Program — appears to be gaining its sea legs.
And while it’s likely to fall short of its original goal of keeping three million or more homeowners out of foreclosure (the program cost was slashed from $75 billion to only $29 billion), it already has about 856,000 workouts on its books.
Notably, that includes 40,000 in September alone.
HAMP, part of the Obama Administration’s Making Home Affordable Program, allows borrowers in or near default to modify their loans so their monthly payment is about 31 percent of their monthly gross income.
While not every modification is successful, the government-run program is doing a lot better than the private market’s attempts: Only about 20% of HAMP mods failed after a year, compared to more than 34% of private loan modifications.