Tuesday, August 4, 2009

Loan Delinquency Snapshot; Courtesy of Making Home Affordable

In the spirit of transparency, Treasury/the Obama Administration today released a status report of the Making Home Affordable (MHA) program; a dubiously crafted government loan modification initiative that has inspired such bumper stickers as "Honk if I'm paying your mortgage!". The whole thrust of the program is - to use the President's favorite word - incentivize mortgage servicers to modify certain loans, the eligibility of which is based upon a set of criteria that includes properly answering the question "Are you having trouble paying your mortgage?". The MHA also has a mortgage refinancing component to it, although to qualify for this more prestigious program, one must be able to estimate the degree to which one is underwater on his investment, as well as indicate that he is current on his mortgage.

Making Home Affordable is only an infant of a program, however less than favorable public opinion polls have prompted the Administration to release a report showing it's progress as quickly as possible. While the report below is worthless on it's face, it did provide a handful of government sponsored data points; the most intriguing being the Administration's "Estimated eligible 60+ day Delinquency loans" by mortgage servicer. That data has been converted into chart format above, and provides an interesting snapshot of the who's who of delinquent loans. Bank of America's figures do include those loans serviced by Countrywide Financial (I'm anticipating the reaction to the ridiculously high number of delinquent loans on BOA's column).

The only other worthwhile data point to come from this report is a measure of just how well each financial institution is playing a smart political game. Obviously, the Administration is going to want to see as high a percentage of eligible loans offered modifications as possible; the repercussions for not playing ball appear to be as severe as the forced removal of a CEO, a board member, or a combination of several of the aforementioned. From the data, it looks like JP Morgan is blowing the other big boys away in terms of political correctness, modifying a full 20% of it's eligible loans. In contrast, Bank of America and Wells Fargo modified only 4% and 6% of their books, respectively.

MHA Public Report 8-4-09 Sphere: Related Content

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