The servicers processing applications for the Home Affordable Modification Program (HAMP) are having trouble keeping up with requests for loan workouts.
At the end of May, more than 221,000 HAMP applications were waiting to be processed, according to a new government report due for release on July 30. The number is up from 133,649 unprocessed applications at the end of November. At the recent rate, the number of unprocessed applications will grow by more than 27,000 a month, according to the report, prepared for Congress by the special inspector general for the Troubled Asset Relief Program. "The problem of delays is real and could have a disastrous impact on homeowners who are not able to keep up with their payments during this delay and lose their homes," warns TARP special inspector general Christy Romero.
The mounting backlog is partly due to changes this year by the Consumer Financial Protection Bureau that require servicers to consider other options for homeowners as they process a HAMP application, say Treasury officials.