The latest Home Affordable Modification Program statistics were announced Monday in a report used to measure the success of federal loan modification programs. The HAMP report indicated that slightly more than 10% of eligible borrowers received a loan modification that became permanent. Yet only one in three homeowners who started in the trial program has been kicked out.  The number of homeowners who have received a permanent federal loan modification rose to 340,459 in May from 295,348 reported in April.  That’s about 11% of 3.2 million HAMP eligible loans.  At the same time, the number of trial loan modification plans continued to fall as borrowers must now provide proof of income prior to any new payment plan. Active trial modifications fell to 467,672 from 637,353 in April. And borrowers who received a mortgage modification under the old rules are now required to prove their income before getting a permanent modification.  An additional 150,000 borrowers who could not prove their income or keep up with the new payments had their modifications canceled in May, bringing the total number of cancellations to 429,696. That’s about 35% of the 1.24 million trial modifications started.

Mortgage relief was extended from Bank of America, Freddie Mac and Wells Fargo.  These banks agreed to grant borrowers in the Gulf Coast region mortgage relief on their home loan payments because of the gulf crisis. Freddie Mac forbearance policies allow its servicers to suspend a borrower’s loan payments for up to three months or reduce payments for up to six months. Based on the individual circumstances, borrowers can receive a forbearance for up to 12 months.  Senior vice president of default asset management at Freddie Mac said, “We are instructing our servicers to work with borrowers with Freddie Mac-owned mortgages to extend forbearance of mortgage loan payments where appropriate to help them stay in their homes as they navigate through this financial hardship,” said Ingrid Beckles.

BofA is working to develop assistance plans and programs to help its borrowers through the crisis, a spokesperson for BofA said. The bank developed similar loan programs following the hurricanes in 2005 and in other disaster situations in the US. Usually, disasters call for an initial 90-day forbearance of payments for BofA borrowers, and, like Freddie Mac, individuals needing more time will be handled on a case-by-case basis.  BofA is currently analyzing its portfolio of mortgages and loan modifications in the region and assessing the situation to determine what other specific needs may need to be addressed in a disaster assistance program for victims of the Gulf of Mexico oil spill.

According to a statement from Wells Fargo, the bank extended its borrowers affected by the Gulf Coast oil spill a 90-day foreclosure moratorium.  “We encourage customers affected by the Gulf events (loss of job or income) to reach out to us to discuss loan workout possibilities.  They suggest working with their with our home loan consultants on to determine available home refinance and loan modification options for their homeownership and financial needs.”

Government home loan modification programs are being offered under the HAMP, or Home Affordable Modification Program.  We are told that some borrowers are getting approved for a loan-workout with mortgage rates as low as 2 % for five and even 10 years for qualify homeowners.  Many mortgage lenders are offering 30-year fixed rates at 5% with no points.  No cost mortgage refinancing requires stellar credential though. Both bankers and mortgage counselors agree that if you’re considering a home refinance, do your homework. Check with your current mortgage holder.  We suggest shopping online for the best refinance loan. If you do not qualify then consider a loan modification from an attorney backed loan modification company.