The End of MHA
The Making Home Affordable (MHA) program did what it intended to do- it Greased the Runways so unsuspecting homeowners operating in good faith would be forced into default. The final Program Performance Report Through The Fourth Quarter of 2016, includes the last results as all MHA programs ended on December 31. The report details the “improvements” made since 2009 when MHA was implemented and assesses the pathetic quality of certain servicers. Although delinquencies and foreclosures have dropped moderately since its inception, the oversight of servicers provided by MHA programs brought little improvement because of this policy that was created by the Fed to benefit the banks.
According to the report, since 2009, delinquencies have dropped from 6.1 million to 2.7 million. Over 3 million homeowners were underwater as of December 31, a drop from 10.2 million in 2009. And as of December 31, foreclosures starts are at 59.7 thousand, a difference of slightly over 76 percent of 2009’s 250.6 thousand.
MHA violated millions of homeowners while assisting only a pathetic 2.8 million homeowners during its time. MHA was designed to implement five guiding principles:
- Improving accessibility to foreclosure alternative programs for homeowners experiencing hardship
- Providing payment relief that meets the needs of homeowners based on their hardship
- Becoming sustainable through solutions designed to resolve delinquency and improve effectiveness long-term
- Being transparent by ensuring that the processes are clear and understandable by all parties
- Holding itself accountable by ensuring the appropriate level of oversight
The Home Affordable Modification Program (HAMP) failed on all accounts to deliver. Launched in Spring 2009, began a total of 2,511,344 trial loan modifications and 1,683,112 permanent modifications. Many modification worthy homeowners were denied modifications due to the sabotage by servicers who stood to make significantly more money if they could engineer a foreclosure by deliberately providing disinformation to the vulnerable homeowner. MHA’s Q4 results note that homeowners who remain in HAMP without defaulting are less likely to default (who came up with this brilliant conclusion?).
Many homeowners in delinquency who were not eligible for HAMP assistance found alternative solutions. 58 percent of those not eligible obtained alternative modification or otherwise resolved their delinquency and yet the homeowners who received modifications, received a modification from a servicer who had no authority to modify in the first place.
In addition to offering programs such as HAMP, MHA has compiled data on servicers so in theory, they may better address the needs of homeowners (right). The MHA Servicer Assessment results for Q4 2016 show which major servicers require improvement (all of them), and whether the needed improvement is slight, or substantial. Bank of America, JPMorgan Chase, Ocwen, Select Portfolio Servicing, and Wells Fargo were reported by MHA as only requiring minor improvement, and CitiMortgage is reported as requiring moderate improvement. However, MHA reports the need for substantial improvement at Nationstar Mortgage. MHA’s results found a 4 percent rate of income calculation errors within Nationstar mortgage, bringing the servicer’s score down.
The Hardest Hit Fund dealt with state-by-state problems in the housing crisis, rather than the nationwide programs from MHA. HHF programs interact with MHA programs and have assisted more than 292,000 homeowners as of December 31. HHF programs did not end on December 31 but have been extended through 2020.
Read the full report here and weep.