HAMP Redefault Rate Less Than 2% After Six Months

New data from the Treasury shows that the redefault rate for the Home Affordable Modification Program (HAMP) is far lower than many critics have projected and well below typical industry averages. According to the July report, the re-default rate (90 or more days past due) for homeowners in permanent modifications for at least six months is 1.7 percent. The latest figures from the OCC put the redefault rate of mortgages modified by the nation's 11 largest servicers – incorporating proprietary mod programs – at 57 percent. Homeowners in permanent modifications are receiving a median payment reduction of 36 percent, more than $500 per month, according to the Treasury’s July report. Homeowners in permanent modifications are guaranteed lower payments for five years as long as they remain current. After five years, then the loan structure is adjusted to offer fixed terms that lock in today’s low interest rates for the life of the mortgage.




http://portal.hud.gov/portal/page/portal/HUD/initiatives/Housing%20Scorecard%20Documents/JULY_Scorecard_1.10.pdf