Mortgage servicers started modifications on 70% of the second liens eligible for the Home Affordable Modification Program, but many are still left out, according to Treasury Department data released Friday.
In January, only half of the eliglible second liens received a modification.
Six of the nine largest servicers participate in the second-lien program known as 2MP, even though Fannie Mae directed its servicers to participate in January 2011. HAMP guidelines require a servicer to offer a second-lien workout or a full extinguishment for any borrower with an active modification on a first-lien. Seconds must have an unpaid balance of at least $5,000 and a monthly payment of at least $100 to qualify.
Participating servicers started modifications on 83,577 of the nearly 119,000 eligible second liens as of May 31, up from less than 31,000 workouts began one year ago under the program, according to the Treasury.
Still, data show 325,000 HAMP first liens are matched with seconds. But 63% of these subordinate loans are ineligible for the program because the first-lien trial either failed or was cancelled, the second was already extinguished or sometimes the borrower decides not to participate.
Wells Fargo (WFC) modified 13,000 or 75.7% of its 17,245 second liens, the highest percentage of any servicer. But Bank of America (BAC) had the highest volume and modified roughly 27,600 or 70% of its nearly 40,000 seconds.
Of the 83,577 total second-lien workouts under 2MP, roughly 18,279 were fully extinguished. According to the Treasury, borrowers who received a full extinguishment of their second lien and modified their first under HAMP reduced their total monthly mortgage payment by an average $1,056.
Most halved their monthly payments, the Treasury said.
jprior@housingwire.com
