More on HAMP, HAFA, Bank of America

n a recent sampling of 60-day (or more) delinquent mortgages, Bank of America determined that only 14 percent of them could qualify for a permanent HAMP loan modification. As Republicans in Congress take aim at HAMP and other government-sponsored homeowner assistance programs, numbers like these – in conjunction with the high costs of running such programs – are likely to make many think twice about keeping them around. And while the White House is threatening to veto bills that eliminate housing relief, more and more people are starting to question the efficacy of these programs.

In total, HAMP has permanently modified 600,000 loans – far short of the projected 4 million originally slated to benefit from the program. BofA reports that 28 percent of the loans studied fell out of the program almost immediately because the lender could not get in touch with the borrower via “110 phone calls and eight customized letters in addition to door-knocking in hard hit markets and hundreds of outreach events across the country.” More than half of the remaining 72 percent failed to pass HAMP underwriting guidelines, and 6 percent of the remainder did not make three consecutive payments under the new terms.

Executive vice president of BofA, Terry Laughlin, describes the position of the lender as one “at a cross roads”: “Despite the loan modification programs [and] our best efforts … foreclosure will be unavoidable moving forward,” he said