It's been a year since the government's Home Affordable Modification Program (HAMP) was implemented and only 170,000 troubled homeowners have received permanent loan restructurings. The number of modifications in the permanent column did increase 45 percent from 116,297 in January, but it's still a mere drop in the bucket when you consider the Treasury's own estimate that there are currently 1.8 million borrowers who are behind on their payments and eligible for the program.
Foreclosed homes taken back by lenders and distressed short sales accounted for nearly half of all residential home sales in California in 2009, according to a market report released this week by the California Association of Realtors. As one of the hardest-hit states by the housing downturn, the Golden State is littered with bank-owned properties and homes facing foreclosure, but the lower prices and increasing buyer appetite for these deals are helping to reduce some of California's distressed inventory.
The Congressional Oversight Panel recently released a report finding that throughout the federal bailout of GMAC, Treasury missed opportunities to increase accountability and better protect taxpayers' money. Despite the $17.2 billion investment the government has made in the company, the panel says there is still no clear business plan for GMAC, and questions why the Treasury didn't just allow the lender to go into bankruptcy. Administration officials estimate that $6.3 billion of the funds given to GMAC may never be repaid.
More traditionally underwritten and higher credit quality loans will be the norm when the U.S. residential mortgage-backed securities (RMBS) market for newly-originated loans re-opens, according to Fitch Ratings. The agency says investors can expect better performance because lenders are returning to a more traditional style of lending, with loans containing better credit, full documentation, and less leverage.
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