Government Projects Fewer Defaults on HAMP Mortgage Modifications

While some seem to think that all the Obama administration is doing is extending or delaying foreclosure procedures, others believe that, without these extensions, home prices would have fallen much further, much faster. Whatever you believe, the numbers seem to indicate that mortgage default and re-default rates are slowing.

In fact, Department of Housing and Urban Development Secretary Shaun Donovan believes re-default rates will be "substantially lower" than the 60 percent predicted by experts. Donovan told the National Association of Real Estate Brokers on Tuesday that the Home Affordable Modification Program "remains on pace to help 3 to 4 million Americans by 2012" even though many borrowers who were first offered temporary modifications through HAMP ultimately were not eligible for permanent ones.

More than 40 percent of those who first applied for HAMP were kicked out of the program because they didn't qualify. So far about 1.2 million homeowners have applied for HAMP and 529,000 were denied. Only 389,000 were offered permanent modifications and the rest are still waiting for a decision.