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The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the January edition of the Obama Administration's Housing Scorecard.  The Scorecard is a summary of housing data from various sources such as the S&P/Case-Shiller house price indices, the National Association of Realtors® existing home sales report, Census data, and RealtyTrac foreclosure information.  Most of the information has already been covered by MND.

The Scorecard is accompanied with the month report on the various programs operated by the Making Home Affordable program including the Home Affordable Modification Program (HAMP), the Second Lien Modification Program (2MP), and Principal Reduction Alternatives (PRA).  The current report contains program activity through the end of November 2012.

Activity under the various programs operated under MHA has now reached 1.43 million borrowers.  The majority of these, 1.12 million have been serviced through HAMP but standard modifications have been done through the GSEs for 84,961 borrowers; FHA and RD HAMP permanent modifications have been completed for 10,463 borrowers.  There have been 101,722 2MP modifications, 29,050 UP Forbearance Plans and 85,881 Home Affordable Foreclosure Alternatives completed.

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Despite the overall improvement in the housing market borrowers are continuing to utilize the various MHA programs.  Since October data was released there have been 21,816 new entrants into the HAMP program and 15,399 borrowers have converted their modifications from trial status to permanent modifications.   In addition to the 1.21 million permanent modifications since the program began almost 68,000 borrowers remain in trial status.

HAMP has now begun reporting on Tier 2 modifications.  Tier 1 modifications follow a series of waterfall steps including interest rate adjustment, term extension, and principal forbearance.  Tier 2 provides another opportunity for borrowers who do not qualify for Tier 1 or who fall out of a Tier 1 trial.  There have been 4,174 Tier 2 modification trials started over the life of the program and 331 permanent modifications.  Of those starting a Tier 2 modification 39 percent were previously in a Tier 1 trial or permanent modification and 22 percent were evaluated for but did not qualify for a Tier 1 trial.   

The 2MP program is available to borrowers when second mortgages interfere with their ability to obtain a modification of the senior lien.  Servicers attempt to work with the second lienholder to modify or erase the 2^nd lien so modifications of the first lien can proceed.

To data the program has identified 123,638 second liens that appear eligible for 2MP and 82 percent or 101,722 of these liens have been modified.  About a quarter of these modifications involve full extinguishments of the second lien and 68,559 liens were modified.

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The most controversial of the MHA programs has been the PRA or Principal Reduction Alternative program.  Principal reductions are offered as a part of the loan modification arsenal but not for GSE loans.  This has been the subject of considerable conflict between the GSE's conservator the Federal Housing Finance Agency (FHFA) and Congress.  To data servicers have started 110,482 PRA modifications under HAMP and 85,361 permanent modifications.  There have been 3,652 permanent HAMP PRA modifications started since the last MHA report.   Servicers have started another 146,141 trial modifications using non-HAMP principal reduction guidelines and 113,439 permanent modifications. 

"The Obama Administration's efforts to speed housing recovery are showing continued progress as the January scorecard indicators highlight clear forward momentum in the housing market," said HUD Deputy Assistant Secretary for Economic Affairs Kurt Usowski. "The housing market has clearly bottomed out nationally and is turning a corner with new home construction increasing to a level not seen since June 2008 and home prices showing strong annual gains. But with so many households still struggling, we have important work ahead."

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