Wednesday, December 16, 2009

Obama HAM program failure

In a report out last week, the number of final modifications completed by the major banks under the main Obama HAM program are ridiculous. Some 31,382 homeowners have entered into final modifications through the end of November under that specific program. That is out of millions of eligible homeowners, of which 759,000 have entered into trial plans. Here is a breakdown:

According to the report, through the end of November, J.P. Morgan Chase & Co. /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 41.32, +0.46, +1.13%) has 143,027 three-month trial modifications started under the program. It has made 4,302 modifications permanent. Wells Fargo Bank /quotes/comstock/13*!wfc/quotes/nls/wfc (WFC 25.81, +0.15, +0.57%) has 104,808 trial modifications started and 3,537 permanent modifications using the program.

But Bank of America Corp. /quotes/comstock/13*!bac/quotes/nls/bac (BAC 15.31, +0.12, +0.79%) has started 158,462 three month trial modifications with the program and has made just 98 permanent. Citigroup Inc. /quotes/comstock/13*!c/quotes/nls/c (C 3.47, -0.09, -2.53%) has started 103,478 three-month modifications under the plan. Of those only 271 have become permanent.

There are other programs that have resulted in modification for homeowners, but clearly the banks are more willing to foreclose on properties than modify loans. Most major banks have announced in the last week their intent or completion of paying back their TARP bailout money. They obviously want to be out from under public scrutiny and restrictions on payment of excessive salaries and bonuses.

The president met with 10 major bank CEO's this week to push several issues, including speeding up modifications, but we will see if it actually makes any difference.

Chris Barsness, Esq.

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