Single-family mortgage loans backed by Fannie Mae and Freddie Mac perform better after modification when they are modified through the government’s Home Affordable Mortgage Program (HAMP), according to the FHFA’s Foreclosure Prevention Report for Q2 2015 released this week. Click here to see the complete report.
The Department of Treasury launched HAMP in February 2009 during the worst period of the housing crisis as a way for homeowners facing foreclosure to stay in their homes and lower their monthly mortgage payments through lowered interest rates and modified loan terms. HAMP has saved distressed homeowners an average of about $547 per month (about 39 percent) on mortgage payments by lowering their interest rate in many cases to 2 percent. HAMP is scheduled to expire at the end of 2016.
Only 5 percent of Fannie Mae-backed mortgage loans modified through HAMP were 60 or more days delinquent three months after modification as of the end of Q1 2015. For that same period, 85 percent of mortgage loans insured by Fannie Mae with a HAMP modification were current and performing three months after they were modified, according to FHFA. Compared with loans guaranteed by Fannie Mae with a proprietary, non-HAMP modification, 7 percent were 60 or more days delinquent three months after modification while 77 percent were current and performing, according to FHFA.
For loans with a Freddie Mac guarantee, 84 percent of loans modified through HAMP were current and performing after three months (as of the end of Q1 2015) while 8 percent of those loans were delinquent. For Freddie Mac-insured loans with a non-HAMP modification, the numbers were 75 percent current and performing and 12 percent delinquent.
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