Felix Salmon

BofA’s dismal mortgage-modification rate

By Felix Salmon
December 11, 2009

Yet more proof, if proof be needed, of Bank of America’s dysfunctionality comes in the latest HAMP report from Treasury. BofA has 1,018,192 loans eligible for modification — more than twice as many as anybody else; JP Morgan is in second place with 448,815. Of those million-plus mortgages, BofA has managed to turn the grand total of 98 into permanent modifications — a conversion rate of 0.0096%.

Elsewhere, the conversion rate is much higher: Ocwen Financial, for instance, has 4,252 permanent conversions out of 66,351 eligible loans, for a rate of 6.4%. Even JP Morgan Chase has managed 4,302 permanent conversions, for a rate of just under 1%.

It takes time to move clients through the trial-modification process and into something permanent, of course. But it also takes competence. And that seems to be a commodity in short supply at BofA.

2 comments so far | RSS Comments RSS

In the WSJ’s article on this issue today, they reported that it takes three consecutive payments in the trial program to be eligible for the permanent modification, so the “eligible” figure is much smaller than 1,018,192 that you report. Rather, it is a subset of the pool that includes the trial modifications which has 244,139 people enrolled. I think you might have jumped to a quick conclusion.

Posted by jdanielwright | Report as abusive

Well, there’s eligibility for the modification program as a whole, and then there’s eligibility for the permanent mods, so you do have a point, to some extent.
But so long as Felix is comparing apples to apples (and I’ll bet you dollars to donuts he is), his conclusion will stand.

Posted by retr2327 | Report as abusive

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