Administration Issues Report Card on Servicers' Loan-Mod Efforts
On Aug. 4, the Obama administration released its first detailed report card on how well servicers are doing in carrying out the administration's Making Home Affordable (MHA) modification program. The grade they got was "incomplete"--or in the words used by the administration, "Performance has been uneven."
The public release of the "first monthly Servicer Performance Report" came days after administration officials summoned servicing executives to Washington, D.C., for a face-to-face meeting discussing how servicers needed to improve results under the modification program. The administration originally announced its Homeowner Affordability and Stability Plan back on Feb. 18. More detailed program guidelines about MHA and the Home Affordable Modification Program (HAMP) followed on March 4.
The administration said that when it first announced the program back in February, the stated target was to "offer assistance to up to 3 [million] to 4 million homeowners over the next three years. ... " But administration officials now believe the MHA program's progress for the first five months has been slow and would need to pick up if the program is to meet that goal.
This concern over slow progress prompted the unusual release of servicer-specific results under the program. It also prompted the administration to very publicly set the bar higher for the next three-month period. The Aug. 4 release states, "Today's report discloses performance on a servicer-by-servicer basis in order to increase transparency for participating institutions. The data show that servicer performance has been uneven. The administration has asked servicers to ramp up implementation to a cumulative 500,000 trial modifications started by Nov. 1, 2009. This would more than double in three months the number of trial modifications started in the first five months of the program."
Through July 2009, the Making Home Affordable program has produced 235,247 trial modifications started, according to the new report. (A trial modification is considered "started" when the first trial payment is received.) The report noted that 406,542 trial modification offers have been extended. The number of requests sent by servicers for financial information through July totaled 1,387,218.
While the administration was clearly trying to ramp up results by visibly putting heat on servicers for better results, the folks behind the design of HAMP were also trying to claim some kind of partial victory by saying what an improvement the program has been over all prior efforts. …