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Making Home Affordable Program : Servicer Making Home Affordable Program Servicer Performance Report Through January 2010 Report Highlights Inside: Number of Permanent Modifications Nearly Doubles Over Administration Housing Initiatives 2 Previous Month • In addition to the 116,000 permanent modifications, an additional 76,000 permanent Economic Indicators 3 modifications have been approved by servicers and are pending borrower acceptance. HAMP Program Snapshot 4 • The median savings to borrowers in permanent modifications is more than $500 each month. Waterfall of HAMP‐Eligible 5 Over One Million Borrowers Have Had the Opportunity to Modify Borrowers Characteristics of Permanent Mortgages 6 • Nearly 1.3 million homeowners have received offers for trial modifications. Modifications • More than 940,000 borrowers are in active modifications; 116,000 of those are permanent modifications. Servicer Activity 7 • These homeowners’ lower monthly mortgage payments represent a cumulative savings of $2.2 billion. HAMP Activity by State 8 • New streamlined documentation requirements will make it easier for borrowers to apply for a HAMP modification and receive permanent relief. HAMP Activity by Metropolitan 9 Area Permanent Modifications Are Helping Borrowers Who Have Experienced a Loss of Income Modifications by Investor Type 9 • The majority of permanent modifications – 57.4% – are helping people who are coping with unemployment or who have seen a reduction in hours or wages. List of Non‐GSE Participants 10 National Participation by Mortgage Lenders and Coverage of Outstanding Mortgage Debt Is Extensive • 110 servicers have signed servicer participation agreements to modify loans under HAMP, and new servicers continue to join the program each week. In addition, approximately 2,300 lenders service loans owned or guaranteed by Fannie Mae or Freddie Mac; these GSE loans are automatically eligible for HAMP. • Approximately 89% of eligible mortgage debt outstanding is covered by HAMP participating servicers. 1 Making Home Affordable Program Servicer Performance Report Through January 2010 Overview of Administration Housing Stability Initiatives Initiatives to Support Access to Affordable Mortgage Initiatives to Prevent Avoidable Foreclosures and Credit and Housing Stabilize Neighborhoods Lower Mortgage Rates and Access to Credit: Making Home Affordable – Modifications: • Continued financial support to maintain affordable • Goal of offering 3-4 million homeowners lower mortgage mortgage rates through the Government Sponsored payments through a modification through 2012. Enterprises (GSEs) • Over 1 million homeowners have started trial • Interest rates down a full percentage point over the past modifications and nearly 1.3 million offers for trial year. Every 1% reduction in interest rate saves a new modifications have been extended to borrowers. borrower a median of $1500 annually in mortgage payments. • Homeowners in permanent modifications are saving a median of over $500 per month on mortgage payments. • Access to sustainable mortgages through the Federal In aggregate, homeowners have saved over $2.2 billion Housing Administration (FHA). through trial and permanent modifications. State and Local Housing Initiatives: Making Home Affordable – Refinancing: • Access for Housing Finance Agencies to provide • Refinancing flexibility and low mortgage rates, which mortgages to first-time homebuyers, refinance have allowed over 4 million borrowers to refinance, opportunities for at-risk borrowers, and affordable rental saving an estimated $150 per month on average and housing. more than $6.8 billion in total over the first year. Tax Credits for Housing: Neighborhood Stabilization and Community Development Programs: • Homebuyer credit to help homebuyers buy new homes. • Support for the hardest hit communities to help stabilize • Low-Income Housing Tax Credit (LIHTC) programs to neighborhoods. support affordable rental housing. 2 Making Home Affordable Program Servicer Performance Report Through January 2010 Mortgage Rates Housing Inventory 20 14 18 12 16 14 Conventional 30‐ 10 year Fixed Rate Months' supply of existing 12 8 homes at the current sales pace 10 6 Percent 8 Months 6 4 4 10‐year Treasury Rate Months' supply of new homes 2 2 at the current sales pace 0 0 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 1999 2002 2005 2008 Source: Federal Reserve. Source: National Association of Realtors. Home Prices New and Existing Home Sales Index: Jan 2000 = 100 1,600 7,000 Sales of existing homes 230 Case/Shiller 1,400 (right axis) 6,000 210 20‐city composite 190 1,200 5,000 170 1,000 4,000 150 Sales of new 800 homes (left axis) 130 Loan Performance 3,000 National Home 600 110 FHFA Price Index 2,000 Thousands 400 90 purchase‐only 70 index 200 1,000 50 0 0 1999 2002 2005 2008 1999 2002 2005 2008 Sources: S&P/Case-Shiller Home Price Index; LP/Haver Analytics; FHFA. Source: National Association of Realtors, Census Bureau. Note: Shaded areas indicate recessions. 3 Making Home Affordable Program Servicer Performance Report Through January 2010 Home Affordable Modification Program (HAMP) HAMP Trials Started Snapshot through January 20101 (Cumulative, by Month) 1,200,000 Number of Trial Period Plan Offers 1,008,216 1,269,937 1,000,000 927,739 Extended to Borrowers (Cumulative) 2 818,201 800,000 708,120 All HAMP Trials Started Since Program 1,008,216 600,000 550,970 Inception 416,471 All Active Modifications (Trial and 400,000 946,735 271,765 Permanent) 200,000 153,710 53,791 Active Trial Modifications 830,438 0 May and June July August September October November December January Prior Trial Modifications Canceled 60,476 Source: All trial modifications started by month first payment posted; based on numbers reported by servicers to the HAMP system of record. Active Permanent Modifications All Permanent Modifications Started 117,302 140,000 116,297 Permanent Modifications Canceled 1,005 120,000 100,000 Active Permanent Modifications 116,297 80,000 66,465 1 As reported by the HAMP system of record except where noted. 60,000 2 Source: Survey data provided by servicers. 40,000 31,382 Additional information on HAMP can be found on MakingHomeAffordable.gov 20,000 5,181 or by calling the Homeowner’s HOPE Hotline at 1-888-995-HOPE (4673). 1,711 0 September and October November December January Prior Source: HAMP system of record. 4 Making Home Affordable Program Servicer Performance Report Through January 2010 Waterfall of HAMP-Eligible Borrowers Not all 60-day delinquent loans are eligible for HAMP. Other characteristics may preclude borrower eligibility. Based on the estimates, of the 5.6 million borrowers who are currently 60 days delinquent , 1.7 million borrowers are eligible for HAMP. As this represents a point-in-time snapshot of the delinquency population and estimated HAMP eligibility, we expect that more borrowers will become eligible for HAMP from now through 2012. 6 5.6 5 5.0 4 4.3 3.5 HAMP 3 3.4 Estimated HAMP- Eligible 60+ (Millions) Eligible 60+ 2.5 Day Loans 2 Day Loans Loans (SPA 2.1 1.7 Servicers) 1.7 1 = Estimate 0 1st Lien, 60+ Days Less: Non‐ Less: FHA or VA Less: Non‐Owner Less: Jumbo Non‐ Less: DTI Less Than Less: Negative NPV Less: Vacant Estimated HAMP‐ Delinquent Participating HAMP Occupied at Conforming Loans 31% Properties and Eligible Servicer Origination and Loans Other Exclusions* Originated After 1/1/2009 •Other exclusions include: no longer owner-occupied; investor’s pooling and servicing agreement precludes modification; and manufactured housing loans with titling/chattel issues that exclude them from HAMP. Sources: Fannie Mae; monthly survey of participating servicers for December 31, 2009. Total 60+ figure from 3rd quarter MBA delinquency survey, Q3 2009. 5 Excluded loans are as reported by servicers by survey who have signed a servicer participation agreement for HAMP. Making Home Affordable Program Servicer Performance Report Through January 2010 Modification Characteristics Predominant Hardship Reasons for Permanent Modifications • Borrowers in active trial and permanent modifications have saved more than $2.2 billion through HAMP 1 modifications. Loss of Income 57.4% • Loss of income is the primary borrower hardship for borrowers in permanent modifications. Excessive 10.7% Permanent Modifications by Modification Steps: Obligation Interest Rate Reduction 100% Illness of Principal 2.7% Borrower Term Extension 41.7% Principal Forbearance 27.4% 0% 20% 40% 60% 80% 1 Includes borrowers who are employed but have faced a reduction in hours and/or wages as well as those who have lost their jobs. Note: Does not include 21.0% of permanent modifications reported as Other. Select Median Characteristics of Permanent Modifications Before After Median Loan Characteristic Modification Modification Decrease Front-End Debt-to-Income Ratio1 45.1% 31.0% ‐14.2 pct pts Back-End Debt-to-Income Ratio2 76.1% 59.7% ‐14.7 pct pts Median Monthly Payment $1,431.30 $835.33 ‐$521.85 1 Ratio of housing expenses (principal, interest, taxes, insurance and homeowners association and/or condo fees) to monthly gross income. 2 Ratio of total monthly debt payments (including mortgage principal and interest, taxes, insurance, homeowners association and/or condo fees, plus payments on installment debts, junior liens, alimony, car lease payments and investment property payments) to monthly gross income. Borrowers who have a back-end debt-to-income ratio of greater than 55% are required to seek housing counseling under program guidelines. 6 Making Home Affordable Program Servicer Performance
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