Over 1.1 million borrowers have received a permanent mortgage modification since the program's launch in 2009. That is far short of the Obama Administration's initial target of 4 million modifications. The program has been criticized in the past for being too restrictive in its relief efforts. While improvements to the HAMP program have been made in recent years, proprietary modifications by banks and non-bank servicers far outpace that of HAMP modifications.
But the government points to data from the Office of the Comptroller of the Currency that shows that borrowers save more on a HAMP modification than on private modifications. The HAMP program also has a lower re-default rate than proprietary modifications, the data shows. The HAMP program also helped set the standard for modifications in the servicing industry. HAMP lowers the monthly mortgage payment for borrowers in default or struggling to make their payments by lowering the interest rate, extending the term and in some cases reducing the principal on the mortgage. It is available to borrowers who took out a mortgage before Jan. 1, 2009, who can prove financial hardship and who can show sufficient documentation of income. -- Written by Shanthi Bharatwaj New York. >Contact by Email. Follow @shavenk