A new government report says delinquencies on permanent HAMP loan modifications that are six months old are much lower than servicers' proprietary loan modification programs.
The latest Home Affordable Modification Program figures show the re-default rate (loans 90-days of more past due) on 4,150 HAMP modifications completed in the third quarter of 2009 was only 2.3% after six months.
The re-default rate on all loan modifications made during the third quarter of 2009 was 20%, according to a report issued by the Office the Comptroller of the Currency, and Office of Thrift Supervision.
HAMP re-default rates are "very low," Treasury assistant secretary Herb Allison told reporters.
"Although it is still early, we are seeing signs that the more affordable mortgage payments under HAMP are more sustainable for homeowners and their families," Allison said.
Under a HAMP modification, the borrower's mortgage payments must be reduced to 31% of income. The median reduction in monthly mortgage payments is $510.