Towards the bottom of this article from the Real Estate Channel discusses what happened to home owners that fallen out of the governments HAMP loan modification program.
45% of these HAMP dropouts will at least temporarily benefit from private modifications, many fail to make it through that process as well or will obtain a private modification, only to redefault somewhere down the line. Even those who do make it through HAMP are still highly leveraged, with an average total debt-to-income burden of nearly 64%, and thus are prone to redefaulting.
And look at this figure:
According to the Treasury Department, only 16% of HAMP dropouts are in foreclosure or have completed the foreclosure process. However, 30% are in limbo, and many of these borrowers will likely end up with a short sale or foreclosure. These statistics are based on actions completed through June by the eight largest servicers, representing 74% of HAMP servicers.
It seems some of these home owners will take a little longer getting to foreclosure due to another loan modification program. This just prolongs the shadow inventory waiting to be foreclosed on the home owners. This article come just after August was a recorded month for repossessions.