More Than 500,000 Trial Loan Modifications Canceled

More than 40 percent of the trial loan modifications started under HAMP were canceled as of the end of last month, but permanent mods totaled nearly 400,000, according to the latest Treasury report.
Of the 1,282,912 trials started, 520,814 have been canceled, 364,077 are active, 389,198 are permanent, and the remaining 8,823 were permanent but subsequently canceled.
The most common causes of trial cancellations included missing documentation, trial plan default, and ineligibility due to debt-to-income ratios already being below 31 percent.
Most who were canceled were put in an alternative modification.
Bank of America now leads all servicers with 72,232 permanent modifications, followed by Chase with 54,722 and Wells Fargo with 44,628.
However, smaller loan servicers have been converting a larger share of their eligible 60+ day delinquent borrowers, thanks in part to the use of verified documentation.
Performance of Permanent Modifications
Delinquency data included in the latest report revealed that 4.1 percent of the 126,527 loan mods made permanent in the first quarter of 2010 were already 60+ days late.
Another 1.3 percent are 90+ days late.
The numbers are 5.4 percent and 1.5 percent for mods completed in the fourth quarter of 2009, and 10.5 percent and 4.4 percent for the third quarter of 2009, respectively.
While it’s too early to really tell, the re-default numbers look lower than those tied to other modification programs.