HAMP Data for July: Obama's Homeowner "Hopeium" Fraud Continues

08-20-2010 • CalculatedRiskBlog.com

Notice that the pace of new trial modifications has slowed sharply from over 150,000 in September to under 17,00 in July. The program is winding down ... Debt-to-income ratios If we look at the HAMP program stats (see page 3), the median front end DTI (debt to income) before modification was 44.8% - the same as last month. And the back end DTI was an astounding 79.7 (about the same as last month). Think about that for a second: for the median borrower, about 80% of the borrower's income went to servicing debt. And the median is 63.5% after the modification. These borrowers are still up to their eyeballs in debt after the modification. Summary: Another large number of trial programs were cancelled. This will mean more foreclosures (or short sales) in the near future. A large number of borrowers are still in modification limbo, so there will probably be more cancellations coming. The program is winding down quickly. The borrowers DTI characteristics are poor - suggesting a high redefault rate over the next year or two.