Mortgage modifications made permanent jumped 45% in February, according to newly released U.S. Treasury Department data.
In total, more than 170,000 individuals in the Home Affordabloe Modification Program (HAMP) have been successfully steered into more manageable loans, with another 1.3 million trying to navigate through the trial phase of the plan.
The program is short of the minimum 3 million at-risk homeowners President Obama targeted when the measure was unveiled nearly one year ago. The timeline for that goal extends through 2012.
An estimated 2.82 million U.S. homeowners still lost their properties to foreclosure last year and 4.5 million filings are expected in 2010, RealtyTrac Inc. said in January, Collections & Credit Risk reported.
The Treasury Department has defended its program. "HAMP is doing the job it was designed to do," Phyllis Caldwell, who runs the Treasury’s Homeownership Preservation Office, said in a statement. "Struggling families are receiving payment relief and the housing market is showing signs of stabilization."
Borrowers in permanent modification plans are saving a median of 36% of their before-modification payment with a median savings of more than $500 each month. These homeowners' lower monthly payments represent a combined savings of more than $2.7 billion.
Administration officials told reporters in a meeting last month that about one-third of homeowners who have been in the program for three months are behind on their payments.
Bank of America recently reported that it quadrupled the number of modified mortgages for its customers in January alone. The number of mortgages the bank modified through HAMP jumped to 12,700 from 3,200 a month earlier. Another 13,700 modifications, at that time, were pending.
Elsewhere, Wells Fargo through February had made 24,975 permanent home loan modifications.
Some analysts tell Collections & Credit Risk that many borrowers fall behind again after receiving a loan modification, including with a mortgage, and that there is doubt about the effectiveness of concessions, see story.