11 percent of troubled loan modifications still default
10/26/2010
By Credit.com Staff
About 11 percent of all homeowners that enrolled in the government-run Making Home Affordable Program's popular Home Affordable Modification Program defaulted even after they lowered their interest rate, according to a Reuters report. In its first nine months of existence, HAMP has helped 500,000 consumers renegotiate their home loans, and 28,000 refinances were reported in September alone.
The report said that HAMP has helped nearly 1.4 million consumers earn trial modification, but about 700,000 - just over 51 percent - have had their agreements canceled for a number of reasons. The most popular reason for cancelation was insufficient documentation and trial payment defaults, though some consumers were disqualified because they turned out to be ineligible. The program was only open to those who spent 31 percent or more of their income on housing costs.
Many consumers have sought home loan modifications recently because interest rates on mortgages have hovered at or near record lows for several months.
