Permanent loan modifications up 45% in Colorado
At the end of February, some 2,613 households in Colorado have been granted permanent loan modifications, a 45.4 percent increase from the 1,797 at the end of January, shows government data. That is consistent with the total increase in the Obama Administration’s $50 billion Home Affordable Modification Program, or HAMP, which lowers mortgage rates as low as 2 percent in an effort to keep people out of foreclosure.
Last month’s percentage increase in Colorado is smaller than the 68 percentage increase from December to January, when 1,072 households had received permanent loan modifications.
In Colorado, the homeowners in the Denver-Aurora Metropolitan Statistical Area have received 1,660 permanent loan modifications so far. And 7,200 of the 11,700 households in Colorado who are participating in the trial program are from the Denver-Aurora MSA. . The Denver-Aurora MSA accounts for 0.88 percent of the total HAMP activity. The Denver-Aurora area accounts for almost 70 percent of all of the permanent loans in Colorado. Pueblo had the fewest number of homes in the program, with 312 in active trials and only 51 permanent loans.
Loan mods help housing heal
There are now enough homeowners in the Denver area with permanent loan modifications to help heal the local housing market, said Tom Cryer, a broker with the Kentwood Co.
“I am a free-market guy,” Cryer said. “And I do hate that this rewards bad behavior,” of borrowers not making the payments they promised when they took out the loan.
But Cryer said he thinks the vast majority of people who are trying to keep their homes today are doing their best to be responsible and do the right thing under extraordinarily difficult circumstances. Many buyers took out loans they did not understand a few years ago, and have not been bailed out by rising housing prices, as they expected, he said. Instead, the $250,000 they paid for the home might only be worth $210,000 or less, at a time when they have lost their jobs or have otherwise suffered financially, he said.
“I think if you can do anything to keep people in their homes and encourage them to be productive and stable human beings, is well worth it,” Cryer said. “I think the unintended consequences of programs like this are less painful than some other ones. I think socially, politically and economically, it makes a lot of sense to keep people in their homes.”
Lowering foreclosure rates boosts neighborhoods……. (continue reading at InsideRealEstateNews.com)
