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Do Government Housing Programs Work?

Updated on November 14, 2010

HAMP not successful

I just reviewed the Making Home Affordable Program (HAMP) Servicer Performance Report through September 2010.  This report with the numbers gets a little heavy but points out issues of concern.

After I read the spin and evaluated the data, some disturbing trends seem to be occuring. Upon completion of the permanent modification, the indication in the opening paragraph states "permanent modifications are performing well over time."

The report indicates that at six months, fewer than 10% of the permanent modifications are 60+ days delinquent and fewer than 6% have defaulted from the program after missing three consecutive payments. So the Program finds it acceptable management that within six months of completing the modification, only 6% of the participants have missed half their payments and only 10% have missed a third of their payments.

From the same report when they review the nine month figures, 11% of the mods have defaulted in their entirety and just less than 16% are less than 60 days late.

Now these numbers are based on nearly 500,000 permanent modifications that have been granted to homeowners. Let's make those percentages breakdown into more realistic numbers. After nine months of completion, approximately 55,000 have already defaulted on their plans and approximately 80,000 are delinquent more than two months.

These numbers state that 27% of the completed modifications are in serious position to go into foreclosure/default again. Do these figures add confidence to you that the Government is fixing our housing issue or are they just prolonging the inevitable?


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