One in Four Would-be HAMPers Drop Out

Monday, May 17, 2010 , , 14 Comments

HAMP has not been a big hit among the about-to-get-foreclosed on set, leaving participants feeling used and abused by the runaround with little to show for it.

And the data confirms what would-be HAMPers have been saying all along.

CNN Money:

More than 122,000 borrowers had their trial mortgage modifications canceled in April, bringing the total to 277,640 since the program began about a year ago, according to federal statistics released Monday. Meanwhile, only about 68,000 homeowners were converted from these trials to permanent modifications.

Under the program, known as HAMP, eligible troubled borrowers are put into trial modifications to determine whether they can keep up with the lowered payments and to give loan servicers time to verify income and hardship.

Some 295,348 people have received permanent long-term help under the loan modification plan, but another 3,744 have had their permanent modification canceled.

Modifications are usually canceled if the borrower fails to make the adjusted payments or does not hand in the required income verification paperwork during the trial period.

So far, some 24.6% of trial modifications have become permanent, up from 19.8% a month ago.

Some 637,353 troubled borrowers remain in trial modifications, officials said.

So the "official" numbers say 1 out of 4 homedebtors (to call them homeowners would be silly, don't you agree?) have dropped out of the program or otherwise failed to modify their loans.

Let me tell the Treasury why HAMP hasn't and will never work (depending on what you define "work" as): many of these people were never meant to be "homeowners" in the first place. Some just hit a rough patch and need a little help but most - certainly more than 1 out of 4 - should have never gotten home loans. Under any circumstances, more specifically the Humpty Dumpty circumstances we have now that mean trying to glue him back together any way possible.

Sorry, he ain't getting fixed. Ever.

And let's be clear about the goal of HAMP. I doubt it is to help the homedebtor, as advertised, but instead meant to help the banks clean up the garbage loans they have rotting on their balance sheets that couldn't get cleaned up via mark-to-Disneyland accounting changes. Duh.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


elf2006real said...

I was against TARP and all the other bailouts, and our side continues to be vindicated - most unfortunately.

More Irony - if they actually bit the bullet, said OK it's all off to the auction block there would of course be a glut of dirt cheap houses on the market. And so many people would suddenly be able to afford one. Hell many could buy cash.


And get rid of FDIC as well. Bring back dual liability (boards and managements shit goes on the Sheriff's auction block).

Fuck em.

Anonymous said...

So the "official" numbers say 1 out of 4 homedebtors (to call them homeowners would be silly, don't you agree?)

One very snarky individual I knew used the term "debt serf" in their description. Others "home moaners"


wcv said...

I think the term is HAMPsters.

Anonymous said...

I don't know exactly how reliable this info is - who knows what to believe in the wild wild west of the internet (?) - for all I know, Ted might be putting up the numbers there.

It's kind of informative. I watch builder pricing. Builders/developers led the charge on the way up and they will lead the decline. I'm waiting for the US to follow the Far East in trends where generational mortgages became necessary to facilitate the debt load.

Inter-Generational Mortgage
The concept of the inter-generational mortgage originated in Japan as a result of property prices, particularly in Tokyo, being so high. The inter-generational mortgage is a long-term interest-only mortgage where the borrower makes regular payments during their lifetime. When the borrower passes away, the property is bequeathed to someone (usually their child) who then has the option either of continuing to make the mortgage payments or to pay off the mortgage loan.

my comment - it's like the herpes of the mortgage world.

elf2006real said...

@anon intergenerational debt; well that really would make debt serfs.

I like Darwin better. If I must die, I prefer to die quickly, and not pass what killed me to my kids.

Anonymous said...

No sooner did the Obamabucks Puhleeeze Buy a House Tax Credit end, local builders have rolled out their own form of pricing discounts to take the place of the expired tax credit. Builders and their pricing are the ones to watch. It will put pressure on the sellers of existing houses to reduce prices. I was so ready to go and almost went for it while that tax credit temptation existed but my cat whispered in my ear to tell Uncle Sam "Thanks, but take your tax credit, roll it up into a tube and go fuck yourself with it." - smart little booger for a country stray with no pedigree.

Anonymous said...

NEW YORK ( -- New home construction skyrocketed 40.9% in April compared to last year, according to a government report released Tuesday.

'cause you know what we need in this country is more housing.... supply and demand bitches, supply and demand. Before it's all over with, they might be giving these shacks away.

Anonymous said...

debt to income ratios chart It's like I wrote you once, I spend a fair amount of my time playing Daddy and telling grown people what a bad idea it is to pick up a piece of rope and hang themselves with it even though they are completely cool with the notion. It's like their minds stopped maturing after age 17 - it's kind of lonely in this business when you are mostly honest.

Anonymous said...

64% of the person's total pay going to monthly debt servicing - no problem, what could possibly go wrong there, right?

Anonymous said...
Anonymous said...

"The top fraud incident type in 2009 representing 59 percent of all reported fraud types was application misrepresentation."

-my comment: this is usually an individual that over states his or her income in an attempt to "qualify" for the mortgage - grab rope (check), tie noose (check), slip over my pointy little head (check), kick out the chair from below my feet (check), mission accomplished

"This is the sixth year in a row it has topped the list. In second place were frauds related to appraisal and valuation misrepresentation, which increased from 22 percent of reported misrepresentation in 2008 to 33 percent;

- my comment: this is usually an appraiser who has been given a magic number to hit via the loan brokerage or real estate sales "professional" so that "we can do the deal" (God I hate that phrase)

with an 11-percent increase, this is the most notable increase in reported fraud types in 2009.

This kind of shit has been going on for a long time. This bubble has a little ways to go before it will be over. Every action has an equal and opposite reaction, right? My impression is that's why state budgets are in such sorry shape. They've planned for income streams that are only viable if there is a wide spread fraud riddled real estate bubble going on and don't want to come to grips with the fact that it is over.

Anonymous said...

Insurance companies are still smoking crack where housing is concerned. I am looking at a Declarations page from State Farm right now for a shack in Fairview Hgts., Il and they are making the claim that the dwelling coverage of $229,800 in 2008 has now increased to $239,500 and because of that the premium should go from 856 in 2008 to 987 for 2010. If they are doing that here in boring ass fly over country, I wonder what they're doing out in la-la land or Vegas or Florida.

Anonymous said...

oooohhhh, better buy now or forever be priced out of the market, remember that one? This is where I parted ways with Kunstler's whole doom and gloom predictions on oil. He hung his hat on a Hubbert's Peak oil predictions. Newsflash - Hubbert was a geologist for SHELL OIL and a Technocrat (translation: society of really intelligent nut jobs/control freaks). Cui bono, cui bono. But Kunstler won't budge - he firmly believes we're all going to become Amish whether we'd like to or not.

Marketers are trained to match supply to demand. Everything that consumers need should be available at the right time in the right place at the right price. Coca-Cola's mantra always has been to be within an arm's reach of desire. To be out of stock is to lose a sale or, worse, to lose a sale to a competitor.

But marketers also understand that, by using the illusion of scarcity, they can accelerate demand. This false scarcity encourages us to buy sooner and perhaps to buy more than normal.

Sound familiar?????

Anonymous said...

buh bye Obamabucks tax credits, hello double dip housing values Ever wonder how low prices for shelter (that's what it really is afterall - a basic human need dating back to cavemen, cavewomen, cavekiddies and cavehamsters) would become if all the smoke and mirrors were removed? I do.