WASHINGTON The Treasury Department on Friday acknowledged that the number of homeowners in trouble again despite getting help from the administration's signature mortgage aid program was higher than earlier estimates.
Treasury officials blamed the error on mortgage finance giant Fannie Mae, which acts as the program administrator for President Barack Obama's $50 billion Home Affordable Modification Program (HAMP), which helps subsidize new terms for borrowers struggling to keep up with their mortgage payments.
Treasury said about 4,764 borrowers, who had obtained a permanent HAMP modification, were behind by at least 90 days, while about 53,041 borrowers were behind by more than 60 days. Those figures compare with initial delinquency estimates of 4,151 and 50,662, respectively, first reported on July 20.
"We are confident that this data table correctly reflects the performance of the permanent modifications over time. Early program results indicate that the vast majority who receive permanent modifications through HAMP benefit from them and remain in the program," said Treasury spokesman Mark Paustenbach.
Treasury on July 20 said that the number of borrowers dropping out the program grew in June at almost twice the pace of those getting a permanent modification. Those figures were not revised.
The dropout rate could signal a rise in foreclosures in the second half of the year at a time when the housing market is still fragile and analysts fear another housing slump could threaten the nascent economic recovery.
About 91,000 borrowers dropped out of the program in June, putting the total number of dropouts at 530,000. At the same time, about 49,000 borrowers received a permanent modification in June, bringing that total to 389,000.
That means more than 40 percent of the roughly 1.3 million borrowers who have started in the program since its March 2009 inception have since dropped out, while just over 30 percent have received permanent new terms for their loan.