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Making Home Affordable Program Servicer Performance Report Through August 2010 Report Highlights Inside: More Than 468,000 Permanent Modifications Granted to Homeowners HAMP Program Snapshot 2 Characteristics of Permanent Modifications 3 Servicer Activity 4 Disposition Path of Homeowners Canceled From HAMP Trials 5 Disposition Path of Homeowners Ineligible for HAMP Trials 6 Selected Outreach Measures 7 Waterfall of Eligible Borrowers 7 Homeowner Experience 8 HAMP Activity by State 9 • More than 33,000 new permanent modifications recorded in August. • Homeowners in active permanent modifications realize a median monthly payment reduction of 36%, or more than $500 per month. • For homeowners in permanent modifications, their median first-lien housing expense falls from nearly 45% of their monthly income to 31%. Backlog of Aged Trial Modifications Falls to Fewer Than 95,000 • Fewer than half of the homeowners in active trial modifications have been in a trial for six months or longer, as servicers continue to make decisions on aged trials. The number of aged trials is expected to continue to decline in coming months. • The most common causes of cancellations include insufficient documentation, missed trial payments, or primary housing expense that is already less than 31% of household income. • Servicers reported that more than half of homeowners in canceled trials receive alternative modifications or become current. Fewer than 15% of homeowners in canceled trials are moving toward foreclosure. • Verified documentation is required to initiate a trial modification on or after June 1, 2010. As a result of this change, the program conversion rate is expected to rise. This Month: Quarterly Results of Compliance Reviews • Second Look reviews found that fewer than 5% of loans sampled from large servicers were evaluated incorrectly by the servicer. Where applicable, servicers are required to forestall foreclosure sales and reevaluate these homeowners under HAMP guidelines. Servicers are also required to suspend foreclosure sales on loans where results are under review. • When Second Look results warrant, further servicer actions may be required, including: requiring servicers to reevaluate loans not offered HAMP modifications; submit further documentation; clarify loan status; engage in process remediation, training, or policy clarification; or take other actions as directed by Treasury. • Treasury takes compliance seriously and continues to work with servicers to ensure that they are adhering to program guidelines. HAMP Activity by Metropolitan Area 10 Modifications by Investor Type 10 Results of Compliance Second‐Look Reviews 11 List of Non‐GSE Participants 12 Definitions of Compliance Activities 13 Areas of Compliance Emphasis 14 1 Making Home Affordable Program Servicer Performance Report Through August 2010 HAMP Activity: All Servicers HAMP Trials Started (Cumulative) 1,400,000 Total HAMP Eligibility Eligible Delinquent Loans1 (As of July 31, 2010) Eligible Delinquent 3,010,530 Borrowers2 1,334,548 1,204,895 1,135,892 1,200,000 1,250,916 1,275,704 1,295,421 1,316,239 1,334,117 1,049,446 1,000,000 956,239 838,318 Trial Plan Offers Extended (Cumulative)3 All Trials Started Trial Modifications Permanent Modifications 1,580,464 1,334,117 600,000 26,628 Trial Modifications Canceled (Cumulative) 663,538 200,000 Active Trials 202,521 0 All Permanent Modifications Started 468,058 Permanent Modifications Begun Since July 2010 Report 33,342 Permanent Modifications Canceled (Cumulative)5 19,121 Active Permanent Modifications 448,937 eligible 60+ day delinquent loans as reported by servicers as of July 31, 2010, include conventional loans: in foreclosure and bankruptcy. with a current unpaid principal balance less than $729,750 on a one‐unit property, $934,200 on a two‐unit property, $1,129,250 on a three‐unit property and $1,403,400 on a four‐unit property. on a property that was owner‐occupied at origination. originated on or before January 1, 2009. Estimated eligible 60+ day delinquent loans exclude: FHA and VA loans. loans that are current or less than 60 days delinquent, which may be eligible for HAMP if a borrower is in imminent default. For servicers enrolling after June 1, 2010 that did not participate in the 60+ day delinquency survey, the delinquency count is from the servicer registration form. 2 The estimated eligible 60+ day delinquent borrowers are those in HAMP‐eligible loans, minus estimated exclusions of loans on vacant properties, loans with borrower debt‐to‐income ratio below 31%, loans that fail the NPV test, properties no longer owner‐occupied, manufactured housing loans with title/chattel issues that exclude them from HAMP, and loans where the investor pooling and servicing agreements preclude modification. Exclusions for DTI and NPV results are estimated using market analytics. 3 As reported in the weekly servicer survey through September 2, 2010. 4 Servicers may enter new trial modifications into the HAMP system of record anytime before the loan converts to a permanent modification. 5 A permanent modification is canceled when the borrower has missed three or more consecutive monthly payments. Includes 348 loans paid off. 723,531 564,191 400,000 Trials Reported Since July 2010 Report4 1 Estimated 800,000 Sep and Oct Earlier Nov Dec Jan 2010 Feb Mar Apr May June July Aug Source: HAMP system of record. Note: Servicers may enter new trial modifications into the HAMP system of record anytime before the loan converts to a permanent modification. For example, 26,628 trials have entered the HAMP system of record since the prior report; of those, 17,878 were trials with a first payment recorded in August. Permanent Modifications Started (Cumulative) 500,000 468,058 434,716 398,021 400,000 346,816 299,092 300,000 230,801 200,000 170,207 117,302 100,000 66,938 4,742 15,649 31,424 0 Sep and Earlier Oct Nov Source: HAMP system of record. Dec Jan 2010 Feb Mar Apr May June July Aug 2 Making Home Affordable Program Servicer Performance Report Through August 2010 Predominant Hardship Reasons for Permanent Modifications Modification Characteristics • Aggregate reductions in monthly mortgage payments for borrowers in active trial and permanent modifications total more than $3.1 billion. Loss of Income 1 • The median savings for borrowers in permanent modifications is $515.49, or 36% of the median payment before modification. 59.9% Excessive Obligation 11.5% Permanent Modifications by Modification Step Interest Rate Reduction 100% Term Extension 56.7% Illness of Principal Borrower 2.9% 0% 20% 40% 60% 80% 1 Principal Forbearance 29.5% Select Median Characteristics of Permanent Modifications Loan Characteristic Front-End Debt-to-Income Ratio1 Back-End Debt-to-Income Ratio2 Median Monthly Payment3 Before After Modification Modification Includes borrowers who are employed but have faced a reduction in hours and/or wages as well as those who have lost their jobs. Note: Does not include 17.5% of permanent modifications reported as Other. Loan Status Upon Entering Trial At Risk of Default at Trial Start: 23.1% Median Decrease 44.9% 31.0% ‐13.9 pct pts 79.9% 63.5% ‐14.5 pct pts $1,428.56 $839.21 ‐$515.49 In Default at Trial Start: 76.9% 1 Ratio of housing expenses (principal, interest, taxes, insurance and homeowners association and/or condo fees) to monthly gross income. 2 Ratio of total monthly debt payments (including mortgage principal and interest, taxes, insurance, homeowners association and/or condo fees, plus payments on installment debts, junior liens, alimony, car lease payments and investment property payments) to monthly gross income. Borrowers who have a back-end debt-to-income ratio of greater than 55% are required to seek housing counseling under program guidelines. 3 Principal and interest payment. Note: For all trial modifications started. “At Risk of Default” includes borrowers up to 59 days delinquent at trial entry as well as those in imminent default. “In Default” refers to borrowers 60 or more days late at trial entry. Note: Data on the performance and delinquency of permanent modifications, included in the June 2010 Servicer Performance Report, will be published quarterly. 3 Making Home Affordable Program Servicer Performance Report Through August 2010 Conversion Rate1 HAMP Modification Activity by Servicer As of July 31, 2010 Cumulative As of August 2010 100% Estimated Eligible 60+ Day Delinquent Borrowers1 Trial Plan Offers Extended2 All HAMP Trials Started3 Active Trial Modifications3 Permanent Modifications3 American Home Mortgage Servicing Inc 46,270 28,373 24,043 10,445 11,949 Aurora Loan Services, LLC 32,057 50,970 44,422 2,496 15,103 Bank of America, NA4 383,482 410,054 316,421 72,851 79,859 CitiMortgage, Inc. 115,225 160,942 149,400 14,533 47,236 GMAC Mortgage, LLC 16,291 60,889 49,781 4,536 31,070 Servicer Green Tree Servicing LLC 5,088 7,622 6,627 1,476 91% 13,965 7,483 6,184 908 4,948 J.P. Morgan Chase Bank, NA5 201,771 264,353 211,787 22,799 60,932 Litton Loan Servicing LP 43,957 37,606 35,063 1,782 8,305 Nationstar Mortgage LLC 16,846 27,053 23,276 2,367 10,206 Ocwen Financial Corp. Inc. 29,871 27,507 29,211 5,254 17,970 OneWest Bank 38,456 61,154 45,440 10,762 19,369 PNC Mortgage6 Saxon Mortgage Services, Inc. Select Portfolio Servicing 15,667 22,606 18,203 998 3,768 23,115 45,798 35,126 2,689 11,199 14,934 63,200 38,361 1,937 15,880 US Bank NA 8,461 12,800 12,358 2,227 7,465 Wachovia Mortgage, FSB7 25,937 17,885 15,150 7,049 7,893 Wells Fargo Bank, NA8 139,342 255,986 180,180 13,230 48,830 Other SPA servicers9 14,220 18,183 17,924 4,107 10,128 Other GSE Servicers10 149,593 NA 75,160 20,075 33,693 1,334,548 1,580,464 1,334,117 202,521 448,937 71% 71% 67% 75% 65% 65% 55% 50% 51% 49% 46% 45% 37% 36% 33% 31% 29% 25% 3,134 HomEq Servicing Trial Evaluation : Verified Income Stated Income2 80% 26% 26% 22% 0% Trial Length at Conversion (months): 3.1 3.0 3.1 3.3 4.2 3.0 3.9 3.6 3.6 5.4 4.2 3.6 6.4 4.4 5.1 7.7 5.0 5.3 3.3 3.3 1 Total 1 Estimated eligible 60+ day delinquent borrowers as reported by servicers as of July 31, 2010, include those in conventional loans: in foreclosure and bankruptcy. with a current unpaid principal balance less than $729,750 on a one-unit property, $934,200 on a two-unit property, $1,129,250 on a three-unit property and $1,403,400 on a four-unit property. on a property that was owner-occupied at origination. originated prior to January 1, 2009. Estimated eligible 60+ day delinquent borrowers excludes: Those in FHA and VA loans. Those in loans that are current or less than 60 days delinquent, which may be eligible for HAMP if a borrower is in imminent default. Those borrowers with debt-to-income ratios less than 31% or a negative NPV test, Owners of vacant properties or properties otherwise excluded. Exclusions for DTI and NPV are estimated using market analytics. For servicers enrolling after June 1, 2010 that did not participate in the 60+ day delinquency survey, the delinquency count is from the servicer registration form. 2 As reported in the weekly servicer survey through September 2, 2010. 3 Active trial and permanent modifications as reported into the HAMP system of record by servicers. Subject to adjustment based on servicer reconciliation of historic loan files. 4 Bank of America, NA includes Bank of America, NA, BAC Home Loans Servicing LP, Home Loan Services and Wilshire Credit Corporation. 5 J.P. Morgan Chase Bank, NA includes EMC Mortgage Corporation. 6 Formerly National City Bank. 7 Wachovia Mortgage, FSB consists of Pick-a-Payment loans. 8 Wells Fargo Bank, NA includes a portion of the loans previously included in Wachovia Mortgage, FSB. 9 Other SPA servicers are entities with less than 5,000 estimated eligible 60+ day delinquent borrowers as of July 31, 2010, that have signed participation agreements with Treasury and Fannie Mae. A full list of participating servicers is in Appendix A. 10 Includes servicers of loans owned or guaranteed by Fannie Mae and Freddie Mac. Includes GSE loans transferred from SPA servicers. As measured against trials eligible to convert – those three months in trial, or four months if the borrower was at risk of default. Per program guidelines, all servicers must be using verified income before starting trial modifications by June 1. Prior to June 1, these servicers initiated trials using stated income information. •Other SPA and Other GSE servicers represent a mix of verified and stated income trial starts. Permanent modifications transferred among servicers are credited to the originating servicer. 2 Aged Trials1 as Share of Active Trials 94,000 active trials were initiated at least six months ago. The servicers with the largest number of the oldest trials are Bank of America, J.P. Morgan Chase and CitiMortgage, which account for 62% of the backlog. 80% 71% 60% 40% 61% 61% 56% 55% 52% 52% 50% 40% 35% 34% 32% 31% 28% 26% 22% 21% 20% 10% 4% 3% 0% 1 As of August 31, 2010. Active trials initiated at least six months ago. Each month, the number of aged trials is reduced by the number of active trials that are converted to a permanent modification or canceled, and is increased by the number of active trials newly 6 months old. 4 Making Home Affordable Program Servicer Performance Report Through August 2010 Disposition Path Homeowners in Canceled HAMP Trial Modifications Through July 2010 (8 Largest Servicers) 1 Homeowners Whose HAMP Trial Modification Was Canceled Who Are in the Process of: Servicer American Home Mortgage Servicing Inc. Action Pending2 Action Not Allowed – Bankruptcy Borrower in Process Current The most common causes of trial cancellations are: Short Sale/ Total Alternative Payment Deed in Foreclosure Foreclosure (As of July Modification Plan3 Loan Payoff Lieu Starts Completions 2010) 41 8 103 622 1 175 35 34 3 1,022 Bank of America, NA4 63,382 3,196 7,552 35,638 11,889 1,311 15,556 8,062 1,543 148,129 CitiMortgage Inc. 20,264 7,490 8,979 36,224 1,277 277 1,223 6,351 612 82,697 GMAC Mortgage, LLC 2,009 340 1,057 8,169 117 474 323 1,365 521 14,375 JP Morgan Chase Bank NA5 14,631 504 1,705 59,149 135 2,185 2,376 16,089 3,368 100,142 Litton Loan Servicing LP 3,336 472 1,774 13,552 309 96 823 2,400 475 23,237 OneWest Bank 2,223 329 284 5,320 70 14 698 1,221 969 11,128 Wells Fargo Bank NA6 8,720 540 9,536 58,144 986 2,432 4,485 17,882 4,067 106,792 114,606 23.5% 12,879 2.6% 30,990 6.4% 216,818 44.5% 14,784 3.0% 6,964 1.4% 25,519 5.2% 53,404 11.0% 11,558 2.4% 487,522 100% TOTAL (These 8 Servicers) Note: Data is as reported by servicers for actions completed through July 31, 2010. 1 As defined by cap amount. 2 Trial loans that have been canceled, but no further action has yet been taken. 3 An arrangement with the borrower and servicer that does not involve a formal loan modification. 4 Bank of America, NA includes Bank of America, NA, BAC Home Loans Servicing LP, Home Loan Services and Wilshire Credit Corporation. 5 J.P. Morgan Chase Bank, NA includes EMC Mortgage Corporation. 6 Wells Fargo Bank, NA includes a portion of the loans previously included in Wachovia Mortgage, FSB. Excludes Wachovia Mortgage FSB Pick-a-Payment Loans. Note: Excludes cancellations pending data corrections. • Insufficient documentation • Trial plan payment default • Ineligible borrower: first‐ lien housing expense is already below 31% of household income 5 Making Home Affordable Program Servicer Performance Report Through August 2010 Disposition Path Homeowners Not Accepted for HAMP Trial Modifications Through July 2010 (8 Largest Servicers) 1 Homeowners Not Accepted for a HAMP Trial Modification Who Are in the Process of: Servicer Action Pending2 Action Not Allowed – Bankruptcy Borrower in Process Current The most common causes of trials not accepted are: Short Sale/ Total Alternative Payment Deed in Foreclosure Foreclosure (As of July Modification Plan3 Loan Payoff Lieu Starts Completions 2010) American Home Mortgage Servicing Inc. 2,164 370 4,230 30,282 285 565 1,296 3,106 159 42,457 Bank of America, NA4 19,387 2,673 2,954 10,532 2,403 1,021 22,282 22,278 6,261 89,791 CitiMortgage Inc. 5,378 2,055 8,497 8,410 1,819 3,775 909 3,046 1,048 34,937 GMAC Mortgage, LLC 21,297 3,590 21,691 30,373 2,660 4,738 2,523 13,559 4,589 105,020 JP Morgan Chase Bank NA5 27,616 1,939 72,291 66,584 332 9,030 3,071 11,725 2,569 195,157 Litton Loan Servicing LP 8,706 3,537 7,283 10,016 1,093 323 3,298 8,407 2,388 45,051 OneWest Bank 8,224 1,463 5,540 4,679 393 147 2,601 3,941 4,450 31,438 Wells Fargo Bank NA6 10,868 976 15,621 35,807 1,101 2,557 2,894 10,267 4,304 84,395 TOTAL (These 8 Servicers) 103,640 16.5% 16,603 2.6% 138,107 22.0% 196,683 31.3% 10,086 1.6% 22,156 3.5% 38,874 6.2% 76,329 12.1% 25,768 4.1% 628,246 100% Note: Data is as reported by servicers for actions completed through July 31, 2010. 1 As defined by cap amount. 2 Homeowners who were not approved for a HAMP trial modification, but no further action has yet been taken. 3 An arrangement with the borrower and servicer that does not involve a formal loan modification. 4 Bank of America, NA includes Bank of America, NA, BAC Home Loans Servicing LP, Home Loan Services and Wilshire Credit Corporation. 5 J.P. Morgan Chase Bank, NA includes EMC Mortgage Corporation. 6 Wells Fargo Bank, NA includes a portion of the loans previously included in Wachovia Mortgage, FSB. Excludes Wachovia Mortgage FSB Pick-a-Payment Loans. • Ineligible borrower: first‐ lien housing expense is already below 31% of household income • Insufficient documentation • Imminent default not evidenced by borrower 6 Making Home Affordable Program Servicer Performance Report Through August 2010 Selected Homeowner Outreach Measures Homeowner Outreach Events Hosted Nationally by Treasury and Partners (cumulative) Homeowners Attending Treasury-Sponsored Events (cumulative) Waterfall of Eligible Borrowers 44 44,969 Not all 60-day delinquent loans are eligible for HAMP. Other characteristics may preclude homeowner eligibility. Based on the estimates, of the 5.5 million homeowners who are currently 60+ days delinquent, 1.3 million homeowners are eligible for HAMP. As this represents a pointin-time snapshot of the delinquency population and estimated HAMP eligibility, we expect that more homeowners will become seriously delinquent between now and the end of 2012, and some of those homeowners will be eligible for HAMP. Servicer Solicitation of Borrowers (cumulative)1 5,824,832 6 Page views on MakingHomeAffordable.gov (August 2010) 3,281,857 5 Page views on MakingHomeAffordable.gov (cumulative) 96,086,409 HAMP‐Eligible 60+ Day Delinquent Loans (GSE and SPA Servicers) 5.5 Percentage to Goal of 3-4 Million Modification Offers by 20122 40-53% 1 Source: survey data provided by SPA servicers. Servicers are encouraged by HAMP to solicit information from borrowers 60+ days delinquent, regardless of eligibility for a HAMP modification. 2 In 2009, Treasury set a goal of offering help to 3-4 million borrowers through the end of 2012. Loans (Millions) 4.7 HAMP Estimated Eligible 60+ Day Delinquent Borrowers 4 3.9 3 3.2 3.0 3.0 2 2.2 1.8 = Estimate 1 Call Center Volume Total Number of Calls Taken at 1-888-995HOPE (since program inception) 1.3 1.3 0 Cumulative August 1,495,637 118,542 1st Lien, 60+ Days Delinquent Less: NonParticipating HAMP Servicer Less: FHA or VA Less: NonOwnerOccupied at Origination Less: Jumbo HAMPNonEligible Conforming Loans Loans and Loans Originated After 1/1/2009 Less: DTI Less Than 31% Less: Negative NPV Less: Vacant Properties And Other Exclusions** Estimated HAMPEligible Borrowers * Other exclusions include: no longer owner-occupied; investor’s pooling and servicing agreement precludes modification; and manufactured housing loans with titling/chattel issues that exclude them from HAMP. Borrowers Receiving Free Housing Assistance Through the Homeowner’s HOPETM Hotline 725,429 46,831 Sources: Fannie Mae; monthly survey of participating servicers for July 31, 2010. Total 60+ day delinquency figure derived from 2nd Quarter 2010 MBA National Delinquency Survey. Excluded loans are as reported by large servicers by survey who have signed a servicer participation agreement for HAMP. Source: Homeowner’s HOPETM Hotline. 7 Making Home Affordable Program Servicer Performance Report Through August 2010 Homeowner Experience (8 Largest Servicers)* Servicer Complaint Rate to Homeowner’s HOPETM Hotline (Program to Date, Through August) Average Speed to Answer Homeowner Calls (July) 50 Average of Calls to Homeowner’s HOPETM Hotline for July: 4.0 Seconds 45 40 30 Seconds 7% % of Calls for Specific Servicer That Are Complaints 35 Program to date, there have been 707,681 calls to the Homeowner’s HOPETM Hotline regarding a specific SPA servicer, of which 5.0% included complaints. Below shows specific complaint rates. 25 20 15 10 Program to Date Average: 5.0% 6% 5% 4% 3% 5 2% 0 Calls to OneWest Servicer: Bank of America NA JP Morgan Chase NA Am. Home Servicing GMAC Wells Fargo Litton JP Morgan Chase NA CitiMortgage Litton Bank of America NA Am. Home Servicing GMAC CitiMortgage Wells Fargo Source: Homeowner’s Hotline. Note: Complaint rate is the share of a specific servicer’s call volume that are complaints (i.e., for all calls about JP Morgan Chase, 6.7% included complaints.) Source: Survey data through July 31, 2010, from servicers on call volume to loss mitigation lines. Call Abandon Rate (July) Servicer Time to Resolve Third-Party Escalations (Program to Date, Through August) 5% Homeowner’s HOPETM Hotline Average for July: 1.6% 50 Target: 25 Calendar Days 40 Calendar Days 4% OneWest HOPETM 3% 2% 30 20 10 1% 0 0% JP Morgan Chase NA Bank of America Litton Wells Fargo Am. Home Servicing OneWest GMAC Source: Survey data through July 31, 2010, from servicers on call volume to loss mitigation lines. *As defined by cap amount. CitiMortgage Resolved: Cases (PTD) JP Morgan Chase NA Bank of America NA OneWest 1,256 1,647 290 Am. Home Servicing 186 CitiMortgage Wells Fargo 499 1,044 Source: HAMP Solutions Center. Target of 25 calendar days includes an estimated 5 days processing by HAMP Solutions Center. Litton GMAC 326 397 8 Making Home Affordable Program Servicer Performance Report Through August 2010 HAMP Activity by State State Active Permanent Trials Modifications Total % of Total State Modification Activity by State Active Permanent Trials Modifications Total % of Total AK 86 184 270 0.0% MT 269 479 748 0.1% AL 1,272 2,673 3,945 0.6% NC 3,594 8,604 12,198 1.9% AR 446 1,096 1,542 0.2% ND 40 82 122 0.0% AZ 9,262 23,390 32,652 5.0% NE 257 614 871 0.1% CA 47,266 101,760 149,026 22.9% NH 919 2,132 3,051 0.5% CO 2,555 6,469 9,024 1.4% NJ 6,655 14,626 21,281 3.3% CT 2,507 5,825 8,332 1.3% NM 718 1,415 2,133 0.3% DC 350 749 1,099 0.2% NV 5,650 12,029 17,679 2.7% DE 634 1,451 2,085 0.3% NY 10,083 19,054 29,137 4.5% FL 24,339 53,777 78,116 12.0% OH 4,593 10,092 14,685 2.3% GA 7,393 16,385 23,778 3.6% OK 537 1,044 1,581 0.2% HAMP Modifications HI 791 1,684 2,475 0.4% OR 2,186 4,968 7,154 1.1% IA 505 1,157 1,662 0.3% PA 4,272 9,462 13,734 2.1% ID 829 1,707 2,536 0.4% RI 965 2,338 3,303 0.5% IL 10,455 24,126 34,581 5.3% SC 1,812 4,427 6,239 1.0% IN 1,948 4,502 6,450 1.0% SD 90 167 257 0.0% KS 520 1,083 1,603 0.2% TN 2,061 4,763 6,824 1.0% KY 797 1,750 2,547 0.4% TX 6,295 11,260 17,555 2.7% LA 1,133 2,271 3,404 0.5% UT 1,844 4,209 6,053 0.9% MA 4,787 11,332 16,119 2.5% VA 4,889 11,305 16,194 2.5% MD 6,382 15,051 21,433 3.3% VT 146 367 513 0.1% ME 563 1,251 1,814 0.3% WA 3,929 8,779 12,708 2.0% MI 6,571 15,266 21,837 3.4% WI 1,963 4,520 6,483 1.0% MN 3,094 8,744 11,838 1.8% WV 267 714 981 0.2% MO 2,199 4,976 7,175 1.1% WY 119 220 339 0.1% 898 1,886 0.3% MS 696 1,710 2,406 0.4% Other* * Includes Guam, Puerto Rico and the U.S. Virgin Islands. 988 Note: Includes active trial and permanent modifications from the official HAMP system of record. 5,000 and lower 20,001 – 35,000 5,001 – 10,000 35,001 and higher 10,001 – 20,000 Mortgage Delinquency Rates by State Source: 2nd Quarter 2010 National Delinquency Survey, Mortgage Bankers Association. 60+ Day Delinquency Rate 5.0% and lower 10.01% - 15.0% 20.01% 5.01% - 10.0% 15.01% - 20.0% and higher 9 Making Home Affordable Program Servicer Performance Report Through August 2010 15 Metropolitan Areas With Highest HAMP Activity Metropolitan Statistical Area Los Angeles-Long Beach-Santa Ana, CA New York-Northern New JerseyLong Island, NY-NJ-PA Riverside-San Bernardino-Ontario, CA Active Trials 13,735 13,195 Total Permanent HAMP Modifications Activity 28,982 26,421 42,717 39,616 Modifications by Investor Type (Large Servicers) % of All HAMP Activity 6.6% 6.1% Servicer Bank of America, JP Morgan Chase NA2 Wells Fargo Bank, NA 10,057 23,974 34,031 5.2% Chicago-Joliet-Naperville, IL-IN-WI 10,058 23,288 33,346 5.1% Miami-Fort Lauderdale-Pompano Beach, FL 9,797 20,289 30,086 Phoenix-Mesa-Glendale, AZ 7,619 19,385 Washington-Arlington-Alexandria, DC-VA-MD-WV 6,812 Atlanta-Sandy Springs-Marietta, GA GSE NA1 3 CitiMortgage, Inc. Private Portfolio Total 98,687 46,804 7,219 152,710 39,016 31,931 12,784 83,731 44,115 11,429 6,516 62,060 41,660 3,934 16,175 61,769 GMAC Mortgage, LLC 20,998 6,362 8,246 35,606 OneWest Bank 15,024 12,892 2,215 30,131 4.6% Ocwen Financial Corporation, Inc. 6,187 16,710 327 23,224 27,004 4.1% American Home Mortgage Servicing Inc 1,168 21,226 0 22,394 15,953 22,765 3.5% Select Portfolio Servicing 434 15,524 1,859 17,817 5,978 13,303 19,281 3.0% Aurora Loan Services, LLC 10,732 6,650 217 17,599 Wachovia Mortgage, FSB4 161 72 14,709 14,942 Las Vegas-Paradise, NV 4,706 9,847 14,553 2.2% Saxon Mortgage Services Inc. 1,138 12,149 601 13,888 Detroit-Warren-Livonia, MI 4,072 9,237 13,309 2.0% Nationstar Mortgage LLC 8,495 4,073 5 12,573 Orlando-Kissimmee-Sanford, FL 3,824 8,939 12,763 2.0% Litton Loan Servicing LP 1,021 9,066 0 10,087 US Bank NA 6,458 15 3,219 9,692 2 5,560 294 5,856 Boston-Cambridge-Quincy, MA-NH San Francisco-Oakland-Fremont, CA Sacramento-Arden-ArcadeRoseville, CA Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 3,397 8,077 11,474 1.8% 3,910 7,020 10,930 1.7% 3,212 7,648 10,860 1.7% 3,289 7,443 10,732 1.6% A complete list of HAMP activity for all MSAs is available at http://www.financialstability.gov/docs/MSA%20Data%20Aug%202010.pdf HomEq Servicing PNC Mortgage5 4,156 195 415 4,766 Green Tree Servicing LLC 4,259 330 21 4,610 Remainder of HAMP Servicers 56,023 6,143 5,837 68,003 Total 359,734 211,065 80,659 651,458 1 Bank of America, NA includes Bank of America, NA, BAC Home Loans Servicing LP, Home Loans Services and Wilshire Credit Corporation. Morgan Chase Bank, NA includes EMC Mortgage Corporation. 3 Wells Fargo Bank, NA includes a portion of the loans previously included in Wachovia Mortgage, FSB. 4 Wachovia Mortgage, FSB consists of Wachovia Mortgage FSB Pick-a-Payment loans. 5 Formerly National City Bank. 2 J.P. Note: Figures reflect active trials and permanent modifications. 10 Making Home Affordable Program Servicer Performance Report Through August 2010 Results of Compliance Second-Look Reviews (Q1 2010) Making Home Affordable-Compliance (MHA-C) conducts Second Look1 reviews of homeowners that were not solicited or evaluated for HAMP modifications to ensure that the servicer’s actions were appropriate. In an average of 4.8% of the cases, MHA-C disagreed with the servicer’s actions. When Second Look results warrant, further servicer actions may be required, including: requiring servicers to reevaluate loans not offered HAMP modifications; submit further documentation; clarify loan status; engage in process remediation, training, or policy clarification; or take other actions as directed by Treasury. Results of Q1 2010 Second Look Reviews 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Average of Q1 Disagrees: 4.8% 0% American Home CitiMortgage GMAC MHA‐C Disagrees 2 JPMorgan Chase Litton OneWest Pending MHA‐C's Further Review 3 Wells Fargo Group Average MHA‐C Agrees 1 Second Look Results are derived from a statistical sample of loan files for borrowers not offered a HAMP modification (typically 100 loan files). Chart shows results for largest servicers; an additional 30 servicers were evaluated in the 1st quarter. Cases where the borrower was not appropriately solicited or evaluated for HAMP. 3 Cases where MHA-C was unable to determine if the servicer’s actions were appropriate without further information from the servicer. 2 The results of Second Look reviews help determine the types of other compliance activities and frequency with which those activities will be conducted. (See Appendix B1). Servicers are required to reconsider loans in the “Disagree” category, and submit additional information for loans in the “Pending MHA-C’s Further Review” population. Importantly, where MHA-C disagrees with the disposition of a loan or is unable to determine if the loan was evaluated properly, servicers are reminded to continue forestalling foreclosure of the loan until these items are resolved. The frequency of Second Look loan file reviews performed during the 1st quarter of 2010 varied by servicer due to a number of factors: changes in MHA-C sampling methodology, more stringent data submission deadlines, and coordination with overall compliance activity. Beginning in the 3rd quarter sampling period, MHA-C revised its sampling strategy to sample monthly from all large servicers in order to provide more consistent trending by servicer and greater comparability of results between servicers. As noted in the chart, non-compliance rates for both Wells Fargo Bank and JP Morgan Chase were above the average and resulted in requiring the servicers to make changes to their solicitation and eligibility processes. Additionally, MHA-C conducted further compliance activities to help ensure the servicers were making the changes required. The Second Look chart does not include results for Bank of America because other activities were conducted in this time period that included the same processes (e.g. eligibility) evaluated during Second Look reviews. Those activities identified required Bank of America’s solicitation and eligibility processes. MHA-C conducted further activities to help ensure required changes were being implemented. Please see Appendix B for a detailed description of compliance activities. compliance solicitation, changes to compliance 11 Making Home Affordable Program Servicer Performance Report Through August 2010 Appendix A: Non-GSE Participants in HAMP Allstate Mortgage Loans & Investments, Inc. American Eagle Federal Credit Union American Home Mortgage Servicing, Inc AMS Servicing, LLC Aurora Loan Services, LLC Bank of America, N.A.1 Bank United Bay Federal Credit Union Bay Gulf Credit Union Bayview Loan Servicing, LLC Bramble Savings Bank Carrington Mortgage Services, LLC CCO Mortgage Central Florida Educators Federal Credit Union Central Jersey Federal Credit Union CitiMortgage, Inc. Citizens 1st National Bank Citizens First Wholesale Mortgage Company Community Bank & Trust Company CUC Mortgage Corporation DuPage Credit Union Eaton National Bank & Trust Co Farmers State Bank Fidelity Homestead Savings Bank First Bank First Financial Bank, N.A. First Keystone Bank First National Bank of Grant Park Franklin Credit Management Corporation Fresno County Federal Credit Union Glass City Federal Credit Union GMAC Mortgage, LLC Golden Plains Credit Union Grafton Suburban Credit Union Great Lakes Credit Union Greater Nevada Mortgage Services Green Tree Servicing LLC Hartford Savings Bank Hillsdale County National Bank HomEq Servicing HomeStar Bank & Financial Services Horicon Bank Horizon Bank, NA Iberiabank IBM Southeast Employees' Federal Credit Union IC Federal Credit Union Idaho Housing and Finance Association iServe Residential Lending LLC iServe Servicing Inc. J.P.Morgan Chase Bank, NA2 Lake City Bank Lake National Bank Litton Loan Servicing Los Alamos National Bank Marix Servicing, LLC Metropolitan National Bank Midwest Bank & Trust Co. Mission Federal Credit Union MorEquity, Inc. Mortgage Center, LLC Mortgage Clearing Corporation National City Bank Nationstar Mortgage LLC Navy Federal Credit Union Oakland Municipal Credit Union Ocwen Financial Corporation, Inc. OneWest Bank ORNL Federal Credit Union Park View Federal Savings Bank Pathfinder Bank PennyMac Loan Services, LLC PNC Bank, National Association Purdue Employees Federal Credit Union QLending, Inc. Quantum Servicing Corporation Residential Credit Solutions RG Mortgage Corporation Roebling Bank RoundPoint Mortgage Servicing Corporation Saxon Mortgage Services, Inc. Schools Financial Credit Union SEFCU Select Portfolio Servicing Servis One Inc., dba BSI Financial Services, Inc. ShoreBank Silver State Schools Credit Union Sound Community Bank Specialized Loan Servicing, LLC Spirit of Alaska Federal Credit Union Stanford Federal Credit Union Sterling Savings Bank Suburban Mortgage Company of New Mexico Technology Credit Union Tempe Schools Credit Union The Golden 1 Credit Union U.S. Bank National Association United Bank United Bank Mortgage Corporation Urban Trust Bank Vantium Capital, Inc. Verity Credit Union Vist Financial Corp. Wells Fargo Bank, NA3 Wealthbridge Mortgage Corp. Wescom Central Credit Union Yadkin Valley Bank 1 Bank of America, NA includes Bank of America, NA, BAC Home Loans Servicing LP, Home Loan Services and Wilshire Credit Corporation. 2 J.P. Morgan Chase Bank, NA includes EMC Mortgage Corporation. 3 Wells Fargo Bank, NA includes Wachovia Mortgage FSB and Wachovia Bank NA. 12 Making Home Affordable Program Servicer Performance Report Through August 2010 Appendix B1: Description of Compliance Activities Note: Areas of compliance emphasis and servicer‐specific compliance data will be updated quarterly. Description of Compliance Activities Freddie Mac, serving as Compliance Agent for Treasury’s Home Affordable Modification Program (HAMP), has created a separate division known as Making Home Affordable ‐ Compliance (MHA‐C). Using a risk‐based approach, MHA‐C conducts a number of different types of compliance activities to assess servicer compliance with HAMP guidelines for those servicers that have signed a servicer participation agreement with Treasury and for those loans for which Treasury pays incentives (non‐GSE loans), as described below. On Site Reviews: Readiness & Governance – Reviews performed by MHA‐C to assess the servicer’s preparedness for complying with new/future HAMP requirements, or to research a trend or potential implementation risk. Reviews are performed as needed, determined by frequency of new program additions. NPV Reviews – Reviews conducted by MHA‐C to determine the servicer’s adherence to the HAMP NPV guidelines. For those servicers that have elected to recode the NPV model into their own systems (recoders), the testing process is designed to ensure the servicer’s NPV model is accurately calculating NPV and that the model usage is consistent with directives. At a minimum, recoders are subject to quarterly off‐site testing and semi‐ annual for on‐site reviews. For servicers using the Treasury NPV Web Portal, reviews of data submissions are performed on a monthly basis. On Site Reviews: Implementation – Review conducted by MHA‐C covering the servicer’s overall execution of the HAMP program. Areas covered include, among other things, solicitation, eligibility, underwriting, document management, payment processing, reporting, and governance. Reviews are performed at a minimum for larger servicers on a semi‐annual schedule and for smaller servicers on an annual schedule. modifications and Second Look monthly loan file review cycle. These Loan File reviews consist of a statistical sample (typically 100‐ 150 loan files per larger servicer). Smaller servicers are also statistically sampled on a quarterly or semi‐annual cycle. Incentive Payment Reviews – Reviews performed by MHA‐C to determine the accuracy and validity of borrower and investor incentive payments, and to assess whether borrower payments are appropriately allocated to borrowers’ loan principal in accordance with HAMP guidelines. They are performed at a minimum annually on the top 21 servicers. (See next page for Areas of Compliance Emphasis) Loan File Review – A review performed by MHA‐C of a servicer’s non‐performing loan portfolio primarily to assess completeness of relevant documentation and appropriate loan modification decisioning. This includes reviews of loans which have successfully converted to a permanent modification to ensure they meet the HAMP guidelines, as well as loans that have not been offered HAMP modifications to ensure that the exclusion was appropriate (“Second Look”). Larger servicers are on an alternating permanent 13 Making Home Affordable Program Servicer Performance Report Through August 2010 Appendix B2: Areas of Compliance Emphasis In the coming months, following will be areas of emphasis for MHA‐C, to ensure ongoing compliance. ensure that the recoded model produces results consistent with the Portal model. Program Changes: HAFA, 2MP, Unemployment and Principal Reduction As of October 1, Servicers will be required to begin using a new version (4.0) through the Portal or in their recoded model. Conversion to 4.0 is expected to add additional control challenges and servicers are expected to review and appropriately enhance their current NPV procedures and controls. As with any NPV model change, Recoders are required to obtain certification from MHA‐C prior to utilizing a recoded 4.0 model. Servicers are required to be prepared prior to the implementation of new programs. At the outset of new programs, servicers should focus on making necessary changes to processes, policies, procedures, and controls in order to implement the new requirements effectively. To the extent that systematic controls are not fully implemented, it is important that servicers design and fully communicate to staff any alternative processes (manual or otherwise) that will help ensure eligible borrowers are considered and provided the opportunity to participate in the programs, where appropriate. With several recently implemented or new programs including HAFA, 2MP, Unemployment, and Principal Reduction, MHA‐C will emphasize in the coming quarter both policy design and overall program execution. Specific attention will be given to transitional alternative processes required in advance of full systems integrations of new programs. In the coming quarter, MHA‐C will remain focused on servicers’ NPV Model management practices. Additionally, and in consideration of the conversion to NPV version 4.0, MHA‐C will evaluate conversion preparation and contingency planning. Recoding servicers with complex systems may face unusual challenges in returning to Portal use in the event that their recoded version 4.0 NPV model cannot be certified by the required timeframe. Accordingly, MHA‐C will expect servicers to prepare to implement contingency plans , including; detailed contingency plans for return to Portal use and revalidation through the Treasury Portal, where necessary. NPV Model Management and 4.0 Model Preparation IR2 Data Integrity Proper and consistent use of the Net Present Value model is essential in assuring that potentially eligible borrowers are appropriately evaluated for the HAMP program. Servicers who do not utilize the Treasury NPV Portal model (Recoders) are required to have their recorded model tested and certified by MHA‐C before use, establish and maintain documentation of their internal controls and governance processes and periodically test their model and controls to help Servicers are required to timely report accurate information to the Program Administrator’s IR2 database. The information reported is used for both public reporting and in deriving the incentive payments. Because of the importance of this data, Servicers must maintain controls which assure that information in the database is accurate and consistent with source documentation utilized to process the modification. In the recent quarter, MHA‐C has continued to focus on Servicer governance processes and associated controls over the accuracy and integrity of IR2 data. This focus will continue. Specifically, MHA‐C will evaluate controls over data mapping and governance processes designed to assure consistency of data between loan files, servicer systems of record, and the IR2 database. Governance Strong governance practices (policies, procedures, training, and internal assessments) are essential to maintaining the integrity of the HAMP program. Such governance helps assure eligible borrowers are considered for the program, ineligible borrowers are excluded, and that accurate information is reported to the Program Administrator. In coming quarters, MHA‐C will focus on governance policies, procedures, and practices, and in particular quality assurance activities. The objective of these assessments will be to ensure that the governance processes include an evaluation of potential areas of HAMP risk (e.g. appropriate exclusion as well as appropriate inclusion of borrowers), adequate testing programs, sufficient documentation of testing results, and appropriate action plans to address identified areas for remediation. 14
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