Treasury: Nearly 4,500 HAFA Short Sales and Deeds-in-Lieu Completed
04/01/2011 By: Carrie Bay
The Treasury Department released a new report on the government’s foreclosure prevention efforts Friday. In addition to the Home Affordable Modification Program (HAMP) numbers that are regularly recounted, new this month are details on short sales and deeds-in-lieu, as well as second lien modifications.
Treasury reports that as of the end of February, 4,488 homeowners completed a short sale or deed-in-lieu (DIL) under the Home Affordable Foreclosure Alternatives (HAFA) program. The federal program provides up to $3,000 for relocation assistance after a homeowner exits the home.
Another 10,177 homeowners have agreements in place with their servicers for HAFA short sale and DIL transactions. Treasury notes in its report that the HAFA short sale timeline “lasts at least 120 days,” and requires the cooperation of junior lien holders in order to complete the transaction.
This report also marked the department’s first reporting on its Second Lien Modification Program (2MP), which provides assistance to homeowners in a first lien HAMP mod who have an eligible second lien with a participating servicer.
At February month-end, 16,951 homeowners in the HAMP program had also received a second-lien modification through 2MP. Since homeowners with first lien mortgage modifications under HAMP become automatically eligible when their second lien servicer participates in 2MP, Treasury says this number will continue to grow.
In addition, Treasury reported that 26,147 homeowners were put into permanent first-lien HAMP mods during the month of February, bringing the total number of active permanent modification under the program to just over 557,000.
Homeowners in active permanent mods realize a median monthly savings of $528, or 37 percent of their pre-modification payment, according to Treasury. To date, officials say HAMP has lowered borrowers’ monthly mortgage payments by an aggregate $5.4 billion.
The number of borrowers who have fallen out of the program stands out in the Treasury’s list of program stats. Since HAMP began in early 2009, over 1.5 million trial modifications have been initiated. More than 746,000 trials were canceled, and 76,600 mods have been cancelled after they were made permanent, for a fall-out rate of more than 50 percent.
Administration officials say that looking at the results behind the numbers, each month HAMP keeps over 25,000 new families in their homes, but the program has had its fair share of critics.
Earlier this week, the U.S. House of Representatives passed legislation to terminate HAMP, and a group of Republican senators have already introduced their own legislation to end the program.
The White House, though, says the continuation of the program is important to reviving the housing market and sustaining the nation’s economic recovery, and President Obama has said he will veto any HAMP-ending bill.