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HAMP loan modifications up 40 percent in September; Serious mortgage delinquencies up 147 percent in past year

Dennis Norman

Dennis Norman

By: Dennis Norman

Yesterday the Federal Housing Finance Agency (FHFA) reported that Fannie Mae and Freddie Mac’s trial mortgage loan modifications under the Obama Administrations Home Affordable Modification Plan (HAMP) were up more than 40 percent in September 2009 from the previous month. According to the report, mortgage loans that are 60-plus-days delinquent increased to 1,401,000 borrowers in July, up a whopping 147 percent from July, 2008 when there were 566,000 borrowers 60 plus days delinquent.

Here are highlights from the report (all the data, unless noted otherwise is from July 31, 2009):

  • 4.6 percent of Freddie Mac and Fannie Mae loans were 60 plus days delinquent. A scary thought that almost 1 in 20 homeowners with a mortgage in the US fall in this category.
    • 58 percent of the borrowers in this category had a credit score that was equal to or better than 660 at the time they took out the loan. The remaining 42 percent had a credit score below 660 at the time of the loan.
  • 6.76 percent of Freddie Mac and Fannie Mae loans were delinquent. Greater than 1 in 15 homeowners are delinquent on their mortgages. This has increased almost 20 percent since the beginning of the year when the rate was 5.68 percent.
  • There were 5,492 short sales (a sale at a price that nets less than the total amount due on the mortgage) in July, up 23.6 percent from the month before and up a staggering 268 percent from a year ago. So far in 2009 there have been 25,251 short sales.

Federal Housing Finance Agency 60 plus day mortgage delinquency chart

There was some good news in the report with regard to foreclosures. There were 23,369 foreclosures in July, which represents very little change from June’s 23,314 foreclosures. There were 85,342 new foreclosures started in July which is down over 30 percent from June’s 122,317 foreclosure starts. Clearly the 65,026 new borrowers that began HAMP loan modifications in July moved some homeowners off the foreclosure rolls.

Federal Housing Finance Agency Foreclosure Report July 2009

Over the next few months we will begin to see if the Home Affordable Modification Program (HAMP) is successful in helping borrowers keep their homes, or if it just ends up stalling the foreclosure process. Hopefully it will be the former.

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