The pace of mortgage modifications picked up in the second quarter as a streamlined version of the U.S. government’s Home Affordable Mortgage Program (HAMP) started to produce results.
HAMP, launched in 2009, was designed to help homeowners who are struggling, but still making timely payments, to avoid default. It allows servicers to modify terms of loans guaranteed by Fannie Mae or Freddie Mac in order to lower monthly payments. In January, the U.S. government started offering a streamlined modification process for borrowers who met the basic criteria for HAMP but had already missed three mortgage payments. These borrowers are put in a three-month trial payment plan.