Two years into the Home Affordable Modification Program (HAMP), it appears the number of borrowers able to qualify for HAMP mods has leveled off while candidates for proprietary modifications surged in the first quarter.
The Office of the Comptroller of the Currency (OCC) and Office of Thrift Supervisions (OTS) reported Wednesday that 180,100 at-risk homeowners entered payment trials for proprietary modifications in the first quarter, up 123% from the prior quarter.
Meanwhile, the number of candidates entering the three-month HAMP payment trials totaled 57,650, up only 9% from the fourth quarter and down nearly 70% from a year ago.
The OCC/OTS Mortgage Metrics report released on Wednesday tracks nine major servicers -- eight national banks and one federally chartered thrift.
These servicers are supposed to consider HAMP modifications first before placing borrowers into proprietary mods or other workout options.
But the performance of proprietary mods has improved over the years, according to Laura Maggiano, director of policy at Treasury's homeownership preservation office.
Before HAMP, 60% of loans re-defaulted 12 months after a proprietary modification. "Now, 67% are still current 12 months after modification," she told an American Securitization Forum in Washington.
The joint agency Mortgage Metrics report also shows the nine servicers completed 119,800 foreclosures in the first quarter, up 28% from a year ago.
The servicers also completed nearly 160,000 loan modifications in the first quarter, including 53,300 HAMP mods.
The HAMP mods reduced the borrowers' monthly payments by an average of $562 per month in the first quarter. Proprietary mods lowered monthly payments by $218 a month.