The program altered 470,000 troubled mortgages in the third quarter of the year, according to a new report from the Office of the Comptroller of the Currency, which oversees the program. That was a drop of 17 percent from the second quarter and a year-over-year decline of 32 percent.
The reason for the stark fall in the number of loans modified was likely because banks had sufficiently sifted through their records and found almost all the borrowers that qualify for the program, the report said. HAMP has been seeking homeowners in severe financial distress since it was started in early 2009.
Of the loans modified in the third quarter, 88 percent had their monthly principal and interest payments decreased, the report said. More than 54 percent of those were reduced by 20 percent or more, as payments came down an average of $396 per month.
Originally, the program was expected to help about 3 million Americans modify their home loans either through government-backed refinances or through write downs of the total amount they owe, the report said. However, the total number of consumers helped by HAMP is now unlikely to even reach 1 million.
HAMP would have helped more homeowners, but many qualified consumers who had their loans altered later failed to make it through the trial period. This was due to continued delinquency in paying their loan every month.