Following up on my earlier rant about HAMP, via Calculated Risk we have the new statistics on the program from Treasury. And it’s really, really bad.

About 422 thousand modifications are now “permanent” – up from 389 thousand last month – and 617 thousand trial modifications have been cancelled – up sharply from 521 thousand last month.

According to HAMP, there are 255,934 “active trials”, down from 364,077 last month. There is still a large number of borrowers in limbo since only 165 thousand trials were started over the last 5 months. I expect another large number of cancellations in August.

Notice that the pace of new trial modifications has slowed sharply from over 150,000 in September to under 17,000 in July. The program is winding down …

They’re winding down their tentpole foreclosure prevention program at a time of record foreclosures. Cancellations are up – and that’s when the bank has all the leverage because they can try to recoup the difference between the temporary modification and the original payment – and permanent modifications are growing more slowly (and still aren’t much more than 10% of the original number promised). And permanent mod cancellations are up, too, because people who got the mod are missing payments.

What a complete frigging disaster.

David Dayen

David Dayen

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