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Tuesday, September 28, 2010

43% of canceled HAMP loan modification in Bank of America wait for further action

This is similar to what the CEO of Freddie Mac was quoted saying that banks will do anything right to avoid the foreclosure process.   In addition, there is pending legislation that will allow home owners that were foreclosed to rent back their homes from the bank.  Finally, banks in general are just mishandling the paper work necessary to foreclose on a home in the normal time frame.
Of the 148,129 Home Affordable Modification Program trials Bank of America has canceled through August, more than 63,000, or 43%, still await additional loss mitigation action, according to Treasury Department data.
Very few of these canceled trial modification have reached the foreclosure stage.
The Treasury also included data on the amount of foreclosure starts for these canceled trials. BofA has started the foreclosure process on 8,062 of its 148,000 canceled trials, or 5.4%, half of the industry average of 11%. Wells Fargo has started 17,882 foreclosures, and JPMorgan Chase started 16,089 foreclosures on these canceled trials. Citi started 6,351 foreclosures on its canceled trials.
I think the bigger issue here is these home owners didn't have the income for a fix rate loan 30-year loan or have lost their jobs and are no longer qualified for a loan modification.  This has become the big issue, what to do the shadow inventory.

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