HAMP Mortgage Modification Survey 2010

Transcription

1 HAMP Mortgage Modification Survey 2010

2 NCRCHomeAffordableModificationProgramSurvey TheNCRCHAMPMortgageModification Surveyisoneofthefirstconcertedeffortsto bothunderstandtheeffectivenessofthe HomeAffordableModificationProgramand todocumenttheexperiencesofhomeowners throughoutthemodificationprocess. Overview Withintwoweeksoftakingoffice,theObamaadministration announcedthemakinghomeaffordableprogramaspartofa comprehensivestrategytostabilizetheu.s.housingmarket.this public privatepartnershipcombinesthehomeaffordablerefinance Program("HARP")andtheHomeAffordableModificationProgram ("HAMP")inanefforttoincreasethenumberofsustainable mortgagemodifications. TheHARPprogramaimstoassistanestimated4to5million homeownersbyexpandingrefinancingopportunitiestoborrowers whocurrentlyhaveloansheldbyfanniemaeandfreddiemac.the HAMPprogramisdesignedtoassistanother3to4milliondistressed homeownersbyprovidingpublicandprivatesectorsubsidiesto homeownersandlendersinexchangeforareductioninmonthly mortgagepayments. Toreachitsgoalofassisting3to4millionborrowersby2012,the HAMPprogrammustsuccessfullycomplete270,000modifications eachquarterorabout1.09millioneachyear.today,afteralmosta yearofitslaunching,thehampprogramhasfallenshortofthisgoal. Whileithasofferedhomeownersalmost1.35milliontrial modifications,only170,207or12.5percent,havebeenconverted intopermanentmodifications. 1 TheHARPprogramhasalsofallen shortofitsgoals.currently,theharpprogramhasassisted200,000 borrowersrefinanceintolowercostloans. 2 Whileaconsiderable improvementovertheindustry ledhopenowallianceprogram createdunderpresidentbush,theobamaadministration shamp andharpprogramsarenotkeepingpacewithforeclosures.thisis duetoseveralinstitutionalandstructuralchallengesdetailedinncrc testimonysubmittedtocongressforamarch25thhearingofhouse CommitteeonOversightandGovernmentReform. TheNationalCommunityReinvestmentCoalition(NCRC)conducteda surveyofdistressedhomeownersseekingassistancefromncrc s HousingCounselingNetwork(HCN).TheHousingCounselingNetwork isanationalnetworkofhousingcounselingandfairhousingagencies acrossthenation.thesurveyincludedbothhampeligibleandnoneligibleborrowers.surveysweredistributedto76organizationsin45 cities.atthetimeofpublication,29organizationsresponded(see AppendixTable1).Overaperiodoftwomonths,179homeowners respondedtothesurvey. SurveyLimitations TheNCRCHAMPMortgageModificationSurveyof2010 wasnotadministeredtoanationallyrepresentativesample ofdistressedhomeowners.overrepresentationof homeownersinareaswherehousingcounselingagencies arelocatedisobserved.whilethissurveycanprovide valuableinsightastotheeffectivenessofthehome AffordableModificationProgramandtheexperiencesof homeownersthroughoutthemodificationprocess,efforts todrawamorenationallyrepresentativesampleinterms thegeographicalandsocioeconomicdistributionof distressedhomeownersshouldbemadeinfuturesurveys. Identifyingthetypeofloancanprovideusefulinformation totheforeclosureproblemandthemortgagemodification process.itisthusimportanttocorrectlyidentifythe differenttypesofmortgagesinanycontinuationofthis survey. TheHomeAffordable Modification Program(HAMP) Byredirecting$75billionofTroubledAssetReliefProgram (TARP)funding,HAMPprovidessubsidiestoencourage servicers,lenders,andborrowerstoachievesustainable loanmodifications.hampoffersservicers$1,000foreach eligiblemodificationandupto$1,000eachyear,forupto threeyears,duringwhichaborrowerremainscurrenton loanpayments.borrowersreceive$1,000eachyear,forup tofiveyears,iftheyremaincurrentonloanpayments. HAMPoffersadditionalsubsidiestofinancialinstitutions thatassistborrowerswho,despitebeingcurrentontheir payments,areatriskofdefault,tomodifysecondliens andprotectagainsthousepricedeclines. Throughinterestratereductions,loantermextensions, andlast resortprincipalforbearancesordeferments,a borrower smortgagepaymentcanbereducedto31 percentofhisorhermonthlyincome.1hampoffers borrowersatrialmodificationforthreemonths.ifthe borrowerremainscurrentonpaymentsduringthisperiod, theborroweriseligibleforapermanentmodification. 1 The waterfall processinthehampprogramtakestheserviceror lenderthroughaseriesofstepsformakingtheloanaffordable. Principalreductionisoneofthelaststepslisted.

3 NCRCHomeAffordableModificationProgramSurvey ObjectivesoftheSurvey TheNCRCHAMPMortgageModificationSurveyprovidescritical insightintotheobamaadministration shomeaffordable ModificationProgram.Specifically,thissurveyaddresses: Performanceandprogrammaticissues; Issuesoffairnessandequity; eligibleforahampmodification.althoughtheobama administrationhasheldthatthehampprogramwasnot designedtoassistalldistressedhomeowners,asignificant proportionofhomeownerssurveyed(almost20percent) didnotqualify. 4 TheAdministrationshouldreviewthe eligibilitycriteriatodeterminewhetherachangeisneeded toassistgenuinelydistressedhomeowners. TheimportanceandeffectivenessofU.S.Departmentof HousingandUrbanDevelopmentcertifiedcounselorsinthe implementationoftheprogram; Consumeropinionsofandexperienceswiththemortgage modificationprogram;and Pragmaticrecommendationstofurtherimproveuponthe program. (6) LessthanhalfofHAMP eligibleapplicantsinthesurvey receivedamodification.programhistoryalsoshowsthata vastmajorityofthesemodificationsweretemporaryand only12.6percentofthesewereconvertedintopermanent modifications. 5 Moreneedstobedonetodeterminewhy denialratesarehighandtrialmodificationsarenotbeing convertedintopermanentmodificationsonameaningful level. MainFindings ThemainfindingsoftheNCRCHAMPMortgageModification Surveyinclude: (1) LoanservicersforecloseupondelinquentBlackor African Americanborrowersmorequicklythan delinquentwhiteorhispanicborrowers.thisindicatesa needforfairlendinginvestigationsofhampprogram andparticipatingservicers. (2) WhiteHAMP eligibleborrowersarealmost50%more likelytoreceiveamodificationthanafrican American HAMP eligibleborrowers.only24.3percentofafrican Americanrespondentsand32.3percentofHispanicor Latinorespondentsreceivedsomekindofmodification. Incontrast,36.4percentofHAMP eligiblewhites receivedamodification.thesefindingssuggesttheneed toaddressbarriersimpedingeligibilityandequitable access. (3) Almosthalfoftherespondentswereover50.This populationwasmostlikelycountingonhomeequityasa sourceofincomefortheirretirement.congressneedsto ensurethattheforeclosurecrisisdoesnotimperilthe retirementsecurityofaparticularlyvulnerablesectionof Americans. (4) Therearemoreemployment relatedforeclosuresand delinquenciesthanforeclosuresanddelinquencies resultingfromproblematicloans.while76.5percentof respondentsidentifiedjoblossorreductionofwork hoursaswhytheywereunabletokeepupwith mortgagepayments,33.5percentreportedproblematic loansasthereasonfortheirdistressedstatus. 3 (5) Only68.2percentofthedistressedhomeownerswere (7) Homeownerswithforeclosurespendingwerelesslikelyto receiveamodificationthanthosestillcurrentontheir mortgagepayments.halfofthesurveyrespondentswith foreclosurespendingdidnotreceiveamodification comparedto25percentofborrowersthatwerecurrenton theirmortgage.about44percentofborrowersthatwere delinquentbutnotyetintheforeclosureprocessdidnot receiveamodification.inordertomaximizechancesthat themodificationisapproved,hampandotherprograms mustintervenebeforeadistressedborrowerbecomes delinquentandbeforetheforeclosureprocessbegins. (8) SurveyrespondentsthatwerenoteligibleforHAMPwere slightlymorelikelytoreceivemodificationsthan respondentsthatwerehamp eligible.about38percentof respondentsnoteligibleforhampreceivedmodifications comparedto31percentofhamp eligiblerespondents.this doesnotmeanthatnon HAMPborrowersreceivedsuperior modifications;infact,thesurveysuggeststhatpayment reductionswereroughlyequalforhampandnon HAMP borrowers.yet,thisfindingdoessuggesttheneedforthe TreasuryDepartmenttotakestepstoimproveHAMP modificationacceptanceratesanddeepenpayment reductions. (9) Themajorityofthemodificationsinvolvedaninterestrate reduction.principalreductionswerescarce.hampneeds tosignificantlyincreaseprincipalmodifications,particularly inpartsofthecountrywherelargenumbersof homeownersowemorethantheirhomesareworth. (10) Thirtyfivepercentofrespondentswithonemortgagewere approvedforamodificationcomparedtoonly16percentof thosewithtwoormoremortgages.thehampprogram mustsignificantlyincreaseitscapacitytoserveborrowers withsecondliens.

4 NCRCHomeAffordableModificationProgramSurvey HAMP Survey 2010 Findings Today,afteralmostayearofitslaunching,the HAMPprogramhasfallenshortofthisgoal. Whileithasofferedhomeownersalmost1.35 milliontrialmodifications,only170,207or 12.5percent,havebeenconvertedinto permanentmodifications. Table1.SurveyPopulationBreakdown byraceandethnicity Race Frequency Percent White Black or African American Hispanic or Latino Asian Other Race Not provided Total Source:NCRCHomeAffordable ModificationProgramSurvey2010 OrganizationoftheSurvey TheNCRCHAMPMortgageModificationSurveyincludedquestionsaboutbackground characteristicsoftherespondent,propertypurchasepriceandtimeofpurchase, characteristicsofthemortgage,eligibilitytohampprogram,andtypeofmodification received.thesurveyalsogathersinformationaboutthecurrentstatusofthemortgage andreasonsfordelinquency.thelastsectionexaminesthehomeownersexperience completingthemodificationprocess. Inthesurvey,respondentswereaskedtoindicateiftheirloanwasproblematicandif oneormoreofthesetermsandsituationsoccurredwiththeirloan:borrowerincome wasnotdocumentedandverified;loantermsandconditionswerenotadequately explained;interestratesrapidlyincreased;ortheloanhadahigherinterestratewhen theborrowercouldhavequalifiedforalowerrate. ThesurveywasadministeredtohomeownersseekingassistancefromtheHousing CounselingNetwork(HCN),NCRC sconsumercounselingdivision.hcnprovides comprehensivecounselingservices,includingforeclosurepreventionandintervention, lossmitigation,fullfilereview,homebuyereducation,andfinancialliteracy.assuch, HCNhasalargegeographicalfootprintprovidingcounselingtoover10,000household ayear. PopulationCharacteristics InNCRC ssurveyalmosthalfofthesurvey respondentsweremiddle agedorelderly, mostwereminorities,morethanhalfwere female,andthemajorityofrespondentsfell intothe$21,000to$50,000incomerange. Amajorityofthesurveyrespondentsare between30to60yearsofage(seefigure1). Respondentsbetweentheagesof51and60 yearsoldformthelargestagegroup, representingalmostone thirdofsurvey respondents.another12.8percentof respondentsarebetween61to80yearsof age.thus,nearly45percentofrespondents areeitherinorapproachingretirementorare elderly.thisisespeciallytroublingasthese

5 NCRCHomeAffordableModificationProgramSurvey Forallsurveyrespondents,themeanpurchasepricewas $154,838.Themajorityofhomessurveyedwere purchasedbetween2003and2008. borrowersarelesslikelytohaveanassuredincomesourceover thelifeofthemortgage.later,wefurtherexplorethereasonswhy thisagegroupstrugglestostaycurrentontheirmortgage payments.femalerespondentsoutnumbermalerespondentsby 54.8percentto41.9percentrespectively.Afew(3.35percent)did notrevealtheirgender. Thegeographicrepresentationofthesurveysampleisfairly widespread.stateswiththelargestrepresentationinthissurvey includemichigan,arizona,newhampshire,washington, Maryland,NewMexico,Massachusetts,andCalifornia.Because thesurveywasdistributedthroughoutncrc shousingcounseling Network,thegeographicaldistributionofparticipantslargely followsthegeographicaldistributionofthesehousingcounseling Agencies(seeAppendixTable1). Minoritiesarewellrepresentedwithinthesurveypopulation. AfricanAmericansrepresented29.9percentofsurvey respondents,while26.6percentofthesurveypopulationwas HispanicorLatinoand37.3percentofrespondentwaswhite(see Table1topleft). Themajorityofrespondents(51.4percent)fallwithinthe$20,000 $50,000incomebracket.Inaddition,16.8percentofthesurvey respondentshaveanincomebetween$10,000and$20,000,12.3 percentoftherespondentshaveanincomebetween$50,000and $75,000,and9percenthadincomes between$75,000and$150,000(seebelow fortheadditionalcategoriesincludingvery low incomeandmissingincomedata). Amoredetailedexaminationofincomeby raceandethnicityshowstheaverage incomeforwhiterespondentsis$37,423, $44,509forAfricanAmericans,$37,151for Hispanics,and$65,416forAsian respondents.becausewhitesintheus populationgenerallyearnmorethan AfricanAmericans, 6 thefactthatafrican Americanrespondentsinoursurveyhadon averagehigherincomethanwhite respondentsmightsuggestthatafrican Americanborrowershavereceivedmore problematicloansinspiteoftheirincome. Abouthalf(or53percent)oftherespondentswereemployedat thetimethesurveywastaken,while23.5percentwere unemployedandanother23.5percentdidnotrevealtheir employmentstatus.asdiscussedinsubsequentsections,thelack ofemployment,orthereductionofhoursworked,appeartobe majorfactorscontributingtostrugglinghomeowners inabilityto keeptheirhome. Themajorityofrespondents(over75percent)hadonlyone mortgageandjustunderaquarter(24.6percent)heldtwoor moremortgages.morethanhalf(or55.5percent)ofthe respondentsdidnotrefinancetheirhomemortgage,while26 percentrefinancedonce,10.4percentrefinancedtwice,and8.1 percentrefinancedtheirmortgagethreetimes. Nearly66percentoftherespondentsreportedbeingfirst time homebuyerscomparedtoover18percentofthesurvey populationforwhomthiswasnottheirfirsthome.themeanprice ofahomewas$144,646forfirst timehomebuyersand$195,161 forrespondentswhowerepurchasingtheirsecondorthirdhome. Forallsurveyrespondents,themeanpurchasepricewas $154,838.Themajorityofhomessurveyedwerepurchased between2003and

6 NCRCHomeAffordableModificationProgramSurvey Currently,therehavebeennomajorstudiesthatprovideinsight intohowquicklylendersandservicersmovetheirdelinquent borrowersthroughtheforeclosureprocessandwhetherthespeed ofthisprocessdiffersbyrace. Amongthelendersmostfrequentlyrepresentedinthesurvey were:bankofamerica,whichheld14percentoftherespondents mortgages;citigroupandwellsfargo,eachholding8.5percentof therespondents mortgages;jpmorganchasewith7percentof thesurveyedmortgages;andcountrywide,representing5.7ofthe surveyedmortgages.(afulllistofprovidersisprovidedinthe AppendixTable2). Fifty plusagedhomeowners All50 plusyearoldborrowerswereseekingassistanceontheir primary(owner occupied)residence.almost44percentofthis groupofrespondentswaswhitenon Hispanichomeowners.The twomajorminoritygroups,african AmericansandHispanicsor Latinos,eachrepresented26percent.Theremaining3.7percent wasfromotherraces.morethanhalf(or57.5percent)ofthese respondentswerefirst timehomebuyers.themedianyearof purchaseofthehomewasin2000,withpurchaseyearsranging from1970to2008.inaddition,morethan75percentofthisgroup ofrespondentspurchasedtheirhomepriorto2005.further,only 54percentofthe50 plusyearoldsreportedhavingrefinanced theirmortgageatleastonce.withnon respondentsat5percent, morethan41percentofborrowersreportedthattheystillheld theoriginalmortgage. NCRCwasinterestedinseeingifmostofthe50yearoldandolder homeownershadbeenlongtimehomeownerswithconsiderable equityontheirmortgages.oursurveysurprisinglyshowsthat mostoftheserespondentswerefirst timehomebuyerswithless than10yearsorlessinthehome.yet,asignificantamountof distressedhomeownersinthesurveywere50yearsandolder, suggestingthataprimarysourceofwealthfortheirretirements (ie.homeequity)isimperiled. StatusoftheMortgage Thehomeownerswhowereseekingassistancerangedfrombeing currentontheirmortgagetoalreadyhavinghadaforeclosureor bankruptcyjudgment.themajorityofrespondents(78.65 percent)weredelinquentorfacingforeclosurefilings,while22.35 percentoftherespondentswerestillcurrentontheirmortgages (seetable2).delinquencyisnotarequirementforeligibilityfor Table2:BreakdownofStatusofMortgage Mortgage Status Frequency Percent Current Not Current Past due Foreclosure pending Foreclosure judgment Bankruptcy pending Bankruptcy judgment Total Source:NCRCHomeAffordableModification ProgramSurvey2010 thehampprogram.instead,theprogramencouragesparticipationof homeownerswhoareattheriskofimminentdefault.thismayhave encouragedthe22percentofsurveyedhomeownerstoseek modificationspriortofallingbehind. Anyrespondentwhowasnotcurrentonhisorhermortgagewasasked tofurtherreportiftheyhadaforeclosureorbankruptcyfiling.about 27percentofallrespondents(or34.5percentofthe139whowerenot current)hadaforeclosurefilingorajudgmentontheirmortgage.only fourrespondents(2.24percent)hadabankruptcyfilingorjudgment. Respondentswhowerenotcurrentontheirmortgagesrangedfrom being1to26monthsdelinquentonpayments,with50percentofthem being4orfewermonthsbehind.morethan50percentofthe homeownerswithforeclosureproceedingsunderwaywereonly2or3 monthsbehindontheirmortgage.furthermore,almostthree quarters ofhomeownerswithforeclosureproceedingshavebeendelinquentfor only6monthsorfewer. PossibleRacialDisparities Currently,therehavebeennomajorstudiesthatprovideinsightinto howquicklylendersandservicersmovetheirdelinquentborrowers throughtheforeclosureprocessandwhetherthespeedofthisprocess differsbyrace.thoughnotnationallyrepresentative,ncrc ssurvey providesafirstglimpseofpossibleracialdisparitiesinthespeedofthe foreclosureprocess. Thedata,asshowninTable3,suggestsworrisomedifferencesbyrace. Atotalof28homeownerswithaforeclosurefilingorjudgmentalso reportedthenumberofmonthstheirmortgagewaspast due;10were whitenon Hispanic,10wereBlackorAfrican American,and6were

7 NCRCHomeAffordableModificationProgramSurvey Thecurrentmarketisexperiencingasecondwaveof employment relatedforeclosuresasunemployment rateshaverisentolevelsnotseenindecades. HispanicorLatino.Threequarters(or75percent)ofAfrican Americansfoundthemselvesinaforeclosureprocessafterbeing delinquentontheirmortgagesforonly4monthsorfewer.in comparison,75percentofwhiteborrowersfoundthemselvesina foreclosureafterbeingdelinquentfor7monthsorfewer.and morethan75percentofhispanicorlatinoborrowersfound themselvesinaforeclosureafterbeingdelinquentontheir mortgagefor10monthsorfewer. Assumingthattherearenodifferencesinthetimingofseeking assistance,thissuggeststhatlendersandservicerspushdelinquent BlackorAfrican Americanborrowersintotheforeclosureprocess muchsoonerthanborrowersfromotherracialandethnicgroups. Ourinitialtestsfindthisdifferenceisstatisticallysignificant. 8 This questioncertainlyrequiresfurtherexplorationinordertoprovide conclusiveevidenceastoifandwhyafrican Americanborrowers areenteringtheforeclosureprocesssoonerthantheirwhite counterparts. ReasonsforDelinquency/Foreclosure Allbutsixrespondentsreportedtobestrugglingtostaycurrenton theirmortgages.respondentssometimescitedmorethanone reasonforstrugglingwiththeirmonthlymortgagepayments.the mostcommonlycitedreasonswerejoblossorreductionof earningsandproblematicloans.employment relatedreasonswere citedbyanoverwhelmingmajority(or76.5percent)ofthe respondents.about33.5percentofthesurveyedrespondents identifiedholdingaproblematicloanasthereasonwhythey experiencedtroublerepayingtheirmortgage(seetable4).this findingisconsistentwiththecurrenthousingmarketandeconomic situation.namely,problematicsubprimeloanscontributedtothe Race Count Minimum 50 th Percentile 75 th Percentile Maximum White Black Hispanic Other Race Not provided Total firstwaveofforeclosures.thecurrentmarketisexperiencinga secondwaveofemployment relatedforeclosuresas unemploymentrateshaverisentolevelsnotseenindecades. Millionsofworkershavelosttheirjobsorhadtocopewithreduced workhours,andarenowstrugglingtostaycurrentontheir mortgagepayments. Table3.NumberofMonthsPast dueforhomeownerswithaforeclosure FilingorJudgmentbyRaceandEthnicity Source:NCRCHomeAffordableModificationProgramSurvey2010 Additionalreasonsfordelinquencyandsubsequentforeclosure, suchasunforeseenmedicalexpenses,divorce,separation,ordeath offamilymember,werealsoreportedinthissurvey.ofall respondents,14.5percentpointedtounexpectedmedical expenses,ofselforotherfamilymember,asreasonsforstruggling torepaytheirmortgage.atotalof7.8percenthadexperienceda separation,divorce,ordeathoftheheadofhousehold,and12.8 percentcitedotherreasonsforstrugglingwithmortgagepayments includinganincreasedcostoflivingandhouseholdexpenses. 9 Table4belowprovidesamoredetailedlookatthespecific employment relatedcausescitedasanobstacletorepayingone s mortgage.anumberofrespondentscitedmorethanone employment relatedreason:44percentreportedareductionin workhours;39percentreportedthelossofajob;5.6percent experiencedadecreaseinself employmentearnings;and5percent reportedtheexpirationofunemploymentbenefits. Inall,60respondentsreportedthataproblematicloanwasto blamefortheirdifficultyrepayingtheirmortgage.whenaskedto explainwhytheloanwasproblematic,half(50percent)ofthe respondentsreportedthattheloantermsandconditionswerenot adequatelyexplainedtothem;46.7percentreportedthatthe interestrateroserapidlymakingthemunabletopaytheirmonthly payments;and33.3percentreportedhavingreceivedahigher startinginterestratewhentheycouldhavequalifiedforalower rate.moreafrican American borrowersreportedholdinga problematicloanthanwhiteor Hispanicborrowers.OutofallAfrican Americanssurveyed,47.2percent perceivedtheirloanasproblematic, whereasonly29.8percentofhispanic respondentsand25.8percentof whiterespondentsdidso(table6).

8 NCRCHomeAffordableModificationProgramSurvey EligibilityandModifications Inordertobeeligibleforaloanmodification throughthehampprogram,borrowershaveto meetallfourofthefollowingcriteria:(i)the homemustbetheborrower sprimaryresidence, (ii)theamountowedonthefirstmortgage cannotexceed$729,750,(iii)thecurrent mortgagehastobeacquiredbeforejanuary1st, 2009,and(iv)thepaymentonthefirstmortgage hastoexceed31percentoftheborrower sgross income.adetailedexaminationofthesurveyed populationshowsalmost99percentofthe respondentsmettherequirementsofthefirst criterion(i.e.themortgagebeingontheprimary residence).inaddition,about94percentofthe respondentsmetthesecondandthirdcriteria (i.e.theamountowedandthepurchasedateof theircurrentmortgage).anumberof respondents(almost13percent)didnotrespond toquestionsabouteligibilityforthefourth criteria.thismaybearesultofaninabilityto determinewhetherthepaymentowedontheir firstmortgageexceeded31percentoftheir income.thus,hampeligibilitycouldnotbe determinedfornearly13percentofthesurvey respondents.atotalof68.2percentof Table4.ReasonsforStrugglingWithLoanPayments Number of As a percent Reasons for Delinquency Respondents of Total Employment Related Job Loss Reduction of Work Hours Expiration of Unemployment Benefits Decrease in Self Employment Earnings Problematic Loan Medical Expenses (self or family) Separation, Divorce, or death of head of household Other problems Not Struggling 6 Total Table5.ReasonsWhytheLoanWasProblematic respondentsmetalleligibilitycriteriaandwere Reasons Why Loan Was Problematic Count Percent thereforeeligibleformodificationthroughthe Income Not Documented or Verified HAMPprogram;19percentwerenot.ThisHAMP eligibilitymeasureignoresthevoluntarynature Loan Terms Not Adequately Explained oflenderparticipation. 10 Interest Rate Rapidly Increased Themajorityofrespondentsdidnotgeta Borrower Could Qualify for Lower Interest modificationthrougheitherhamporanyother Rate initiative.infact,thepercentofrespondentswho Total didnotgetanytypeofmodification(40.5 percent)exceededthosewhodidobtainsome sortofmodification(30.2percent).atthetime thesurveywasconducted,another20.1 Table6.BreakdownofProblematicLoansbyRace percentofborrowerswereawaitinga Problematic White Black Hispanic Asian Other Missing Total decisiononapendingmodification Loan application. No Moreover,ofthoserespondentswho werehamp eligible(i.e.metalleligibility Yes Total Note:Theabovecategoriesarenotmutuallyexclusive. Respondentscitedmorethanoneoftheaboveasareasonfor fallingbehindontheirmortgage.

9 NCRCHomeAffordableModificationProgramSurvey criteria),48.4percentdidnotgetanytypeofmodification.only31.2percentdid.theremaining16.4percentofhamp eligible respondentswerestillawaitingadecisiononwhethertheirloanswouldbemodified(seetable7). Furthermore,despitethepromotionofthegovernmentloanmodificationprogram,HAMP eligiblehomeownerswereslightlyless likelytoreceivealoanmodificationthanrespondentswhowerenothamp eligible.oftherespondentswhowerenothampeligible,38percentreceivedamodificationthroughsomeotherprogram,whileonly31percentofthosewhowerehamp eligible gottheirloansmodified.moreover,29.4percentoftherespondentswhowerenothamp eligibledidnotreceiveamodification, comparedto48.4percentofrespondentswhowerehamp eligible(seetable7below). AbreakdownofHAMP eligiblerespondentsbyraceandethnicityshowsthatonly24.3percentofafrican Americanrespondents and32.3percentofhispanicorlatinorespondentsreceivedsomekindofmodification.incontrast,36.4percentofhamp eligible whitesreceivedamodification.whileanotablenumberofmodificationswerestillpendingatthetimeofthesurvey,56.8percent ofafrican Americanrespondentsand51.6percentofHispanicorLatinorespondentsdidnotgetamodification,comparedto40.9 percentofwhiterespondents(seetable8). Table7.LoanModificationsbyHAMPEligibility Modification: No Yes Pending Missing Total HAMP Eligible count % count % count % count % count % No Yes Missing Total Table8.LoanModificationsbyRaceandEthnicityofRespondent(HAMPEligible) Modification: No Yes Pending Missing Total Race count % count % count % count % count % White African American Hispanic Asian Other Race Not provided Total Table9.BreakdownofModificationsbyMortgageStatus Modification: No Yes Pending Missing Total Numberof count % count % count % count % count % Mortgages Missing Total Note:Theabovecategoriesarenotmutuallyexclusive.Respondentscitedmorethanoneof

10 NCRCHomeAffordableModificationProgramSurvey Thereweresmalldifferencesintherateofmodificationbygender.Byage,51to60yearoldswerelesslikelytobeapprovedfora modificationthan31to40yearolds.(seeappendixtables4aand4b). Abreakdownofloanmodificationsbymortgagestatusrevealsinterestingfindings.Table9suggeststhat,basedonobservations fromthegeneralsurveypopulation,theforeclosureprocessoroutcome(i.e.foreclosurependingorjudgment)notablyincreased respondents chanceofnotreceivingamodification.morespecifically,50percentofthosewhohadaforeclosurependingand70 percentofthosewhohadaforeclosurejudgmentreceivednomodificationontheirloan,comparedto25percentofrespondents whowerecurrentontheirmortgage.also,43.7percentoftherespondentsthatweredelinquentontheirmortgagepayment receivednomodification. Holdingasecondmortgagedecreasedthelikelihoodofobtainingaloanmodification.Table10belowshowsthatonly16percentof respondentswhoheldasecondorthirdmortgagegottheirloansmodified.incomparison,35.6percentofrespondentswhoheld onlyonemortgagereceivedamortgagemodification. Table10.ModificationsbyMortgageNumber Modification: No Yes Pending Missing Total Number of Mortgages count % count % count % count % count % Missing Total Table11.Post modificationinterestratebyhampeligibility HAMP Eligibility Count New Interest Rate Decline in Interest Rate Average Median Average Median No Yes Missing Total Table12.Post modificationinterestratebyraceofrespondents Count New Interest Rate Race of Respondent Decline in Interest Rate Average Median Average Median White African-American Hispanic Asian Other Race Not provided Total

11 NCRCHomeAffordableModificationProgramSurvey Table13.ReductioninMonthly PaymentbyHAMPEligibility HAMP Eligibility Count Mean reduction Median reduction No Yes Missing Total TypeofModificationsReceived Basedonthesurveyfindings,themostcommontypeof modificationreceivedbydistressedborrowerswasareductionin interestrates.ofthoserespondentswhoprovideddetailsofthe typeofmodificationreceived(45respondents),almostallobtained aninterestratereduction.incontrast,onlyonesurveyrespondent receivedaprincipalreductionandtworespondentsreportedto havereceivedaprincipalforbearance.therateofrespondentsin thissurveywhoreceivedprincipalreductionsislessthanreported bythefederalgovernment.theofficeofthecomptrollerofthe Currency(OCC)andOfficeofThriftSupervision(OTS)Mortgage MetricsReportfoundthatprincipalreductionmodifications represented13percentofallmodificationsinthe3rdquarterof 2009,anincreasefromthe1stquarterof2009inwhichprincipal modificationsrepresentedonly3percentoftotalmodifications. Onaverage,respondentswhoreceivedaninterestratereduction resultingfromamodificationexperienceda3.2percentdropin interestrates.theaverageinterestratepriortothemodification was7.74andtheaveragenewinterestratewas4.48percent. HAMP eligiblerespondentsexperiencedagreaterdeclineintheir mortgageinterestratethannon HAMPeligiblerespondents; HAMP eligiblerespondentsreceivedadecreaseintheirinterest ratesofabout3.25percentagepoints,comparedtoa2.93 percentagepointdeclineamongnon HAMPeligiblerespondents (Table11above). Thedeclineinthepost modificationinterestratewassmallerfor African Americanrespondents,comparedtobothwhitesand Hispanics.TheaveragedropininterestrateforAfrican American respondentswasabout2.84percentagepoints,comparedtoan averagedropofabout3.32percentagepointsforwhite respondentsand3.35percentagepointsforhispanics. Forty fourrespondentsreportedareductionintheirmonthly paymentsafterreceivingamodification.thesereductionsin paymentrangedfrom$5to$1,600,withameanof$ the majorityofrespondentstothisquestion(34outof44)werehampeligible.themeanandmedianpost modificationreductionsin monthlypaymentshowmixedresults(seetable.13).onaverage, Table14.ReductioninMonthlyPayment byraceofrespondent Race of Respondent Count Mean Median White African-American Hispanic Asian Other Race Not provided Total non HAMPeligiblerespondentsreceivedagreaterreductionintheir monthlypayments.however,themedianpaymentreductionfor HAMP eligibleborrowerswas$41higherthanthemedianfornon HAMPeligibleborrowers.Thisindicatesthatthereissmaller deviationamongthehamp eligiblepaymentreductions.duetothe smallsamplesizeofnon HAMPmodifications,wecannotconclusively comparemonthlypaymentreductionsofhampandnon HAMP modifications.however,oneclearconclusionisthatwhileall modificationsdecreasepayments,otherresearchstronglysuggests thatmostpaymentreductionsarenotdeepenough. Thepost modificationreductioninmonthlypaymentbyraceof respondentisprovidedintable.14above.minorityrespondents(in thiscaseafricanamericans,hispanics,andasians)receivedagreater paymentreductionintheirmonthlypaymentsthandidnon minority respondents.thisobservationispossiblyaresultofthefactthat minorityborrowersweremorelikelytoneedagreaterreductionin theirmonthlypaymentstomaketheirmortgagessustainable. Borrowers Experience Whenaskedtoratetheircommunicationwiththeservicerduringthe processofseekingamodification,31.6percentoftherespondents describedtheircommunicationexperienceaseither good or very good,while43.3percentdescribedtheirexperienceaseither bad or verybad. Anadditionalquarter(25.2percent)ofrespondents thoughttheircommunicationwiththeservicerwas fair. Afactorlikelycontributingtorespondents generaldissatisfaction withtheexperienceofapplyingforaloanmodificationcouldbethe numberoftimesborrowerswereaskedtore submitdocumentation. Ofthosewhorespondedtothisquestion(160respondents),70.6 percentreportedbeingaskedtore submittheirdocuments,while 29.4percentdidnot.Respondentswhowereaskedtore submit theirdocumentationhadtodosoanaverageof3times,withafew respondentshavingtore submittheirdocumentsasmanyas8to10 times.

12 Endnotes Making Home Affordable Program, Servicer Performance Report through February 2010, Treasury Department release of March 12, 2010, p.4 ( Dina ElBoghdady and Ranae Merle, Refinancing unavailable for many borrowers, Washington Post Staff, Sunday, February 14, 2010; A01. Respondents were able to identify more than 1 reason why they were unable to keep up with their mortgage payments. Some respondents did not include information as to whether or not they were HAMP-eligible. See the Making Home Affordable Program Servicer Performance Report Through February ACS 3-year Estimates Two observations with unusually small values were excluded from the calculation of the mean purchase price. On average, the African-American borrowers with a foreclosure filing are only 3.8 months delinquent as opposed to all other borrowers with a foreclosure filing being 6.4 months delinquent. A t-test on unpaired data finds the mean number of months delinquent for the two groups to be statistically different from each other at any level greater than 5.4%. Also, nonparametric tests for equality-of-medians and rank sum test find the two groups to be statistically different. The test remains consistent (but slightly less significant) when only the respondents with foreclosure filings, and not judgments, were considered. One respondent reported paying $4,000 to an organization in order to start a loan modification process. According to the February HAMP report released by the U.S. Department of Treasury, 13.3 percent (or 800,000) delinquent loans had a non-participating HAMP servicer (

13 NCRCHomeAffordableModificationProgramSurvey Appendix AppendixTable1.ListofOrganizationsfromtheHousingCounselingNetworkthatParticipatedintheSurvey Organization Location Community Service Programs of West Alabama Inc. Tuscaloosa Alabama Jefferson County Comm. for Econ. Opportunity West Birmingham Alabama Anchorage Neighborhood Housing Services Inc. Anchorage Alaska Fair Banks Neighborhood Housing Services Inc. Fairbanks Alaska Family Housing Resources Tucson Arizona Chicanos Por La Causa Inc. Phoenix Arizona South Arkansas Community Development Arkadelphia Arkansas Cabrillo Economic Development Corp. Ventura California Community Financial Resource Center Los Angeles California Eden Council for Hope and Opportunity (ECHO) Hayward California Del Norte Neighborhood Development Corp. Denver Colorado Housing Resources of Western Colorado Grand Junction Colorado Greater New Haven Community Loan Fund New Haven Connecticut Housing Development Fund Inc. Stamford Connecticut Neighborhood House Inc. Wilmington Delaware Delaware Community Reinvestment Council Wilmington Delaware United Planning Organization Washington District of Columbia Jacksonville Area Legal Aid Jacksonville Florida Miami-Dade Neighborhood Housing Services Inc. Miami Florida Athens Land Trust Athens Georgia East Athens Development Corporation Athens Georgia Urban Hope Community Development Corporation Atlanta Georgia Hale Mahaolu Kahului, Maui Hawaii Pocatello Neighborhood Housing Services Pocatello Idaho Community and Economic Development Association of Chicago Illinois Cook County, Incorporated Northwest Indiana Reinvestment Alliance Hammond Indiana Family Management Credit Counselors Waterloo Iowa Community Housing Services Wichita Kansas Live the Dream Inc. Bowling Green Kentucky Neighborhood Housing Services of New Orleans New Orleans Louisiana Greater New Orleans Fair Housing Action Center New Orleans Louisiana York County Community Action Agency Sanford Maine Peoples Regional Opportunity Program Portland Maine Southeast CDC Baltimore Maryland St. Ambrose Homeownership Center Baltimore Maryland Housing Counelors Network Baltimore Maryland Community Service Network Inc Stoneham Massachusetts Urban Edge Housing Corp. Roxbury Massachusetts West Central Missouri Community Action Agency Appleton City Michigan Minnesota Homeownership Center St. Paul Minnesota Housing Education and Economic Development Inc. Jackson Mississippi

14 NCRCHomeAffordableModificationProgramSurvey Metropolitan St. Louis Equal Housing Opportunity Council St. Louis Missouri Neighborworks Great Falls Great Falls Montana Legal Aid of Nebraska Omaha Nebraska Neighborhood Housing Services of Southern Nevada North Las Vegas Nevada Affordable Housing Education and Development Inc. Littleton New Hampshire (AHEAD) New Jersey Citizen Action Newark New Jersey United South Broadway Corp. Albuquerque New Mexico Neighborhood Housing Services of NYC New York New York Pathstone Rochester New York South Brooklyn Legal Services Brooklyn New York Long Island Housing Partnership Hauppauge New York The Housing Partnership of Charlotte- Mecklenburg Charlotte North Carolina Durham Affordable Housing Coalition Durham North Carolina South Eastern North Dakota Community Action Fargo North Dakota Mustard Seed Development Center Akron Ohio Homeownership Center of Greater Cincinnati Cincinnati Ohio Neighborhood Housing Services of Greater Cleveland Cleveland Ohio Community Action Agency of Oklahoma City Oklahoma City Oklahoma Neighbor Impact Redmond Oregon African American Alliance for Homeownership Portland Oregon Action-Housing Incorporated Pittsburgh Pennsylvania Housing Alliance of York York Pennsylvania Rhode Island Housing Providence Rhode Island Family Service Center of South Carolina Columbia South Carolina Neighborworks Dakota Home Resources Deadwood South Dakota Chattanooga Neighborhood Enterprise Inc. Chattanooga Tennessee Austin Tenants Council Austin Texas Housing and Opportunity through Positive Empowerment Salt Lake City Utah Central Vermont Community Land Trust Barre Vermont Housing Opportunities Made Equal of Virginia, Inc Richmond Virginia Spokane Neighborhood Action Partners Spokane Washington Mountain Cap of West Virginia Inc. Buckhannon West Virginia Couleecap Westby Wisconsin Metropolitan Milwaukee Fair Housing Council Milwaukee Wisconsin CCCS of Northern and Western Wyoming Sheridan Wyoming AppendixTable2.ListofLendersSurveyed. Lender Frequency Percent Bank of America CitiGroup Wells Fargo Chase Countrywide HSBC Indymac Flagstar

15 NCRCHomeAffordableModificationProgramSurvey Nationstar Aurora Loan Services GMAC US Bank AHMSI Beneficial Ocwen SunTrust American Servicing Company CCO Mortgage Carrington Charter Bank EverHome First Franklin First Horizon HFC Saxon Mortgage Shore Mortgage Wachovia American Home Mortgage BB&T Bank of Oklahoma Bayview Loan Servicing EMC Equifirst Equity One Financial Freedom First National Bank Freedom Mortgage Guild Mortgage Harris Bank Homecomings Iberia Bank Liberty Savings Bank Litton Macomb Schools & Government CU Magna Bank Malach Nation Point Nation's Bank PNC Bank Premier Mortgage Lending Select Portfolio Serving Swartz & Brough TCF Bank Taylor Bean Whitaker UBS WMC Mortgage Wilshire World Wide Financial Not Reported Total

16 NCRCHomeAffordableModificationProgramSurvey AppendixTable3a.ProblematicLoans (self reported)bygender. Problematic Loan Female Male Total No Yes Total AppendixTable3b.ProblematicLoans(self reported)byage. Problematic Loan Total No Yes Total Appendix Table 4a. Breakdown of Loan Modifications by Gender. Modification: No Yes Pending Missing Total Gender count % count % count % count % count % Female Male Missing Total AppendixTable4b.BreakdownofLoanModificationsbyAge. Modification: No Yes Pending Missing Total Age count % count % count % count % count % Total

17 NCRCHomeAffordableModificationProgramSurvey thStreet,Suite900,WashingtonDC20005 TELEPHONE: FAX: