Another hat tip to daytrip for sending this in from cnnmoney:
Nearly 1.2 million mortgage modifications have been completed since the Home Affordable Modification Program (HAMP) was first launched four years ago.
Yet more than 306,000 borrowers have re-defaulted on their loans and more than 88,000 are at risk of following suit, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) found in its quarterly report to Congress.
In addition, the watchdog found that the longer a homeowner stays in the HAMP modification program, the more likely they are to default. Those who have been in the program since 2009, are re-defaulting at a rate of 46%, the inspector general found.
Read full article here:
http://money.cnn.com/2013/07/24/real_estate/hamp-default/index.html
Treasury Dept blog on re-defaults:
http://www.treasury.gov/connect/blog/Pages/Understanding-HAMP-Re-Default-Rates.aspx
Conclusion
Treasury will continue to examine whether other steps can help reduce the risk of re-defaults. For example, HAMP currently requires borrowers to obtain counseling if their total (housing and non-housing) debt-to-income ratio exceeds 55 percent. In addition, we are looking at whether financial counseling for borrowers at the beginning of a modification can be effective in reducing re-default risk.
While re-default remains an unfortunate outcome for some borrowers, clearly without HAMP, national foreclosures rates would have been much higher and many borrowers would not have received the assistance they needed. HAMP continues to be the strongest available program for mortgage modifications. Receiving assistance through HAMP gives homeowners a valuable opportunity to strengthen their financial footing and stay in their homes.
We continue to learn from the housing crisis. While the broader housing market is now on the path to recovery, many homeowners are still feeling impacts from the crisis. We will continue to try to reduce the re-default risk while still helping those who need help. This is a positive outcome for these homeowners, their families, their communities and our economy.
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