Shelli Dore’s Real Estate Blog

Colorado sees low use of stimulus mortgage-modification program

Posted on: March 19, 2010

Colorado’s use of the federal government’s stimulus-related Home Affordable Modification Program (HAMP) is relatively low as of February, according to a report released Friday by the U.S. Treasury and Housing and Urban Development departments.

As of the end of last month, Colorado had a total of 14,320 mortgage-loan modifications related to HAMP — 2,613 permanent modifications and 11,707 active trial modifications, according to the report. A trial modification precedes a permanent one.

By comparison, California had the most total loan modifications for that period at 205,606, followed by Florida with 123,144, Illinois with 53,285 and Arizona with 49,763.

States with the least HAMP activity included states with relatively low populations, including North Dakota with 245, South Dakota with 474 and Wyoming with 545.

The HAMP data also included mortgage-delinquency information provided by the Mortgage Bankers Association, and Colorado fared well in that arena, as well.

Colorado’s mortgage delinquency rate, according to the report, was in the second-lowest category, at 5.01 to 10 percent of total mortgage loans. The data relate to loans that are delinquent by 60 days or more.

Two states had the highest delinquency rates — California and Florida — at 20.01 percent and higher.

HAMP was created as part of the stimulus (or “American Recovery and Reinvestment Act of 2009”), the federal government’s $787 billion package designed to jump-start the recovery of the U.S. economy. The HAMP program went into effect in August 2009, and can be used by holders of mortgages insured by the Federal Housing Authority.

Via HAMP, such mortgage holders can modify their loans to make payments more affordable, and mortgage holders have the potential to get the full amount of the existing balance on a loan, according to the government.

As of last month, more than 170,000 homeowners nationwide have gotten permanent mortgage modifications, and another 91,800 such modifications have been OK’d and are pending, according to the report.

Homeowners with permanent modifications are saving a median of more than $500 per month on mortgage payments, for a total of $2.7 billion. Median is the midpoint between highest and lowest figures in a range.

Some 1.1 million homeowners have started trial modifications, and more than 1.3 million homeowners have gotten offers for trial modifications.

HAMP’s goal, the report said, is to offer 3 million to 4 million homeowners lower mortgage payments using loan modifications through 2012.

Click here to download the report in PDF format.

Source: Denver Business Journal

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