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Making Home Affordable

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Making Home Affordable Making Home Affordable Program Performance Report Through December 2011 Inside: Report Highlights SUMMARY RESULTS: Over 930,000 Homeowners Granted Permanent Modifications First Lien Modification Activity 2 • Program to date, homeowners in permanent modifications have saved an Performance of Permanent Modifications 3-4 estimated $10.5 billion in monthly mortgage payments. Homeowners in active first First Lien Modification Characteristics/ lien permanent modifications are currently saving a median of $531 per month – Modifications by Investor Type more than one-third of the median before-modification payment. 5 Home Affordable Foreclosure Alternatives • 84 percent of eligible homeowners entering a HAMP trial modification since June (HAFA) 1, 2010 have received a permanent modification, with an average trial period of 6 Activity for PRA, Treasury FHA-HAMP, 2MP 3.5 months. and UP • After six months in the program, more than 94% of homeowners remain in 7 HAMP Activity by State permanent modifications, with just 9.9% of homeowners 60+ days delinquent. 8 HAMP Activity by MSA/ • HAMP modifications continue to exhibit lower re-default rates than industry Homeowner Outreach modifications as reported by the Office of the Comptroller of the Currency. 9 Aged Trials • This month, additional detail on servicer outreach to 60+ day delinquent 10 homeowners is available, including the average days delinquent at trial start. Early intervention in the delinquency process increases the likelihood the modification SERVICER RESULTS: will perform. First Lien Modification Activity by Servicer 11 Treasury Announces HAMP Extension and Expansion First Lien, PRA, 2MP, and HAFA • On January 27, 2012, Treasury announced important enhancements to HAMP to Activity by Servicer 12 help prevent avoidable foreclosures and strengthen hard-hit communities. These Outreach to 60+ Delinquent Homeowners 13 enhancements extend the program end-date to December 31, 2013 and expand Average Delinquency at Trial Start 14 eligibility to include borrowers whose debt-to-income ratio is below 31 percent, Trial Length 15 properties occupied by a tenant and vacant properties that the borrower intends Conversion Rate 16 to rent. Homeowner Experience 17 • In addition, to encourage investors to consider or expand the use of principal Disposition of Homeowners Not in reduction, Treasury announced it will triple financial incentives for investors who HAMP 18-19 agree to reduce principal for eligible underwater borrowers. • Treasury expects that homeowners may be evaluated under the new program APPENDICES: guidelines beginning in May for trials starting June 1, 2012. Thus, this month’s Participants in MHA Programs 20-21 report pertains only to current HAMP program requirements. Making Home Affordable: Summary Results Program Performance Report Through December 2011 HAMP Activity: First Lien Modifications HAMP Trials Started HAMP is designed to lower monthly mortgage payments to help struggling 1,800 Cumulative Trial Starts (Left Axis) 100 1,775 homeowners stay in their homes and prevent avoidable foreclosure. Monthly Trial Starts (Right Axis) 1,760 1,745 1,750 1,729 Total 1,709 1,700 1,688 1 Eligible Delinquent Loans 2,553,947 1,665 HAMP Eligibility 1,640 (As of Nov. 30, 2011) 2 1,650 Eligible Delinquent Borrowers 891,435 1,613 3 1,600 1,580 Trial Plan Offers Extended (Cumulative) 2,011,288 50 1,545 All Trials Started 1,774,595 1,550 1,511 Trial 4 1,500 Trials Reported Since November 2011 Report 20,079 Trials StartedAll (000s) Modifications Trials StartedNew (000s) Trial Modifications Canceled (Cumulative)5 761,961 1,450 Active Trials 79,307 1,400 All Permanent Modifications Started 933,327 1,350 0 Jan 2011 Feb Mar Apr May June July Aug Sep Oct Nov Dec Permanent Modifications Reported Since 23,374 November 2011 Report Source: HAMP system of record. Servicers may enter new trial modifications into the HAMP system of Permanent record at any time. For example, 20,079 trials have entered the HAMP system of record since the prior Modifications Permanent Modifications Canceled report; 14,230 were trials with a first payment recorded in December 2011. 170,488 (Cumulative)6 Permanent Modifications Started (Cumulative) Active Permanent Modifications 762,839 1,000 1 Estimated eligible 60+ day delinquent loans as reported by servicers as of November 30, 2011, include conventional 933 loans: 910 . in foreclosure and bankruptcy. 900 883 . with a current unpaid principal balance less than $729,750 on a one-unit property, $934,200 on a two-unit 857 property, $1,129,250 on a three-unit property and $1,403,400 on a four-unit property. 817 791 . on a property that was owner-occupied at origination. 800 . originated on or before January 1, 2009. 763 Estimated eligible 60+ day delinquent loans exclude: 731 . FHA and VA loans. 699 700 670 . loans that are current or less than 60 days delinquent, which may be eligible for HAMP if a borrower is in imminent default. 634 2 608 The estimated eligible 60+ day delinquent borrowers are those in HAMP-eligible loans, minus estimated exclusions of 600 loans on vacant properties, loans with borrower debt-to-income ratio below 31%, loans that fail the NPV test, properties no longer owner-occupied, unemployed borrowers, manufactured housing loans with title/chattel issues that exclude them from HAMP, loans where the investor pooling and servicing agreements preclude modification, and trial and permanent modifications disqualified from HAMP. Exclusions for DTI and NPV results are estimated 500 using market analytics. PermanentAll Modifications Started (000s) 3 As reported in the monthly servicer survey of large SPA servicers through December 31, 2011. 4 Servicers may enter new trial modifications into the HAMP system of record at anytime. 400 5 717,390 had trial start dates prior to June 1, 2010 when Treasury implemented a verified income requirement. Jan 2011 Feb Mar Apr May June July Aug Sep Oct Nov Dec 6A permanent modification is canceled when the borrower has missed three consecutive monthly payments. Includes 2,908 loans paid off. Source: HAMP system of record. 2 Note: Unless specified, exhibits in this report refer to HAMP first lien modification activity. Making Home Affordable: Summary Results Program Performance Report Through December 2011 Performance of Permanent Modifications (As of November 30, 2011) This table shows the performance of permanent HAMP modifications at 3, 6, 12 and 18 months of age and includes modifications that have aged at least 3, 6, 12 or 18 months, as applicable. For example: Of loans that became permanent in the 4th quarter of 2010, 8.6% were 60+ days delinquent at 6 months’ seasoning. Delinquency: Months After Conversion to Permanent Modification 3 6 12 18 Modification 60+ 90+ 60+ 90+ 60+ 90+ 60+ 90+ Became # # # # Permanent in: Days Days Days Days Days Days Days Days Q3 2009 3,582 9.7% 3.4% 4,438 14.9% 9.8% 4,681 25.4% 20.7% 5,025 32.1% 28.8% Q4 2009 44,322 5.3% 1.4% 48,150 9.6% 5.6% 52,145 19.8% 15.2% 55,687 25.0% 21.9% Q1 2010 125,654 3.7% 0.9% 152,368 9.7% 5.3% 164,490 20.1% 15.8% 169,872 26.0% 22.4% Q2 2010 150,472 5.0% 1.4% 160,195 11.8% 7.0% 177,407 19.3% 15.8% 174,763 27.6% 23.9% Q3 2010 86,891 4.7% 1.4% 96,941 10.7% 6.6% 105,417 17.9% 14.1% Q4 2010 58,515 4.3% 1.4% 63,009 8.6% 5.4% 65,647 18.0% 14.1% Q1 2011 71,832 2.6% 0.8% 76,734 7.7% 4.5% Q2 2011 80,851 3.4% 1.0% 90,038 8.9% 5.3% Q3 2011 81,732 3.6% 1.1% ALL 703,851 4.1% 1.2% 691,873 9.9% 5.8% 569,787 19.2% 15.3% 405,347 26.6% 23.0% • For permanent loans aged at least 3 months as of November 30, 2011, as reported by servicers through December 16, 2011. • The table stratifies the data by the quarter in which the permanent modification became effective and provides two separate performance metrics: • 60+ days delinquent: All loans that have missed two or more consecutive monthly payments, including 90+ days delinquent loans. • 90+ days delinquent: All loans that have missed three or more consecutive monthly payments. • Loan payment status is not reported by servicers after program disqualification (90+ days delinquent). Therefore, 90+ days delinquent loans are included in each of the 60+ days delinquent and 90+ days delinquent metrics for all future reporting periods, even though some loans may have cured or paid off following program disqualification. • This table reflects a total of 126,727 disqualified loans that have aged 3, 6, 12 or 18 months through the November activity period as reported by servicers through December 16, 2011. • Servicers are required to report monthly payment information on HAMP modifications in the form of an Official Monthly Report (OMR). Servicers did not submit 12,176 OMRs, or 1.6% of total required OMR’s for payments due November 1, 2011. If a servicer does not report an OMR for a loan in a given month, the performance of that loan is not included in the table for that month. This table reflects improved servicer OMR reporting as the modification ages, causing the total loan count for each quarter in months 6 and beyond to be higher than the count in month 3. Reported loan counts may shift from prior reports due to servicer data corrections. If one were to assume all unreported OMRs reflect either a current payment status or the maximum number of missed payments based on the most recently submitted OMR, the re-default rate for permanent modifications that have aged 18 months may range between 22.3%-23.0%.
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