Wells Fargo will not offer refinances to homeowners under the new Home Affordable Refinance Plan unless they are Wells Fargo customers, the bank announced late Monday night. “After further consideration of the new parameters of the Fannie Mae DU Refi Plus program transactions and the current marketing environment, we have amended our policy for loans not currently serviced by Wells Fargo and originated through our Correspondent and Wholesale business channels,” said Carla Clemons, spokesperson for the bank. [Palm Beach Post]

Loan modifications are declining to the point where eventual foreclosures for distressed U.S. homeowners are becoming all but certain, if somewhat delayed, according to a report from Fitch Ratings, released yesterday. Just 36,500 mortgage modifications were completed in December 2010, down from a high of 86,500 in April 2009, the report says, and Fitch says it expects the majority of those modified borrowers to default again within one year, which could lead to another spike in foreclosures. Meanwhile, short sales, deeds in lieu and other foreclosure alternatives are up slightly, and are projected to increase further in 2011. The Obama administration’s foreclosure prevention program and other efforts at promoting loan modifications “have made little more than a dent in the large volume of outstanding distressed loans,” said Diane Pendley, managing director at Fitch. “Based on current and expected inventory, it will take four years to remove the backlog of properties and return the market to balance.” TRD

The Obama administration has just released new data on its much-criticized foreclosure prevention program, along with its monthly housing scorecard, in which it reports a new tally of 1.4 million mortgage modification trials begun under the Home Affordable Mortgage Program between April 2009 and December 2010. According to the administration’s preliminary analysis of the figures, participants in HAMP are mostly middle-income homeowners with underwater mortgages. These homeowners — 18 percent of whom are African American and 26 percent of whom are Hispanic — have a median income of $46,000 and a median credit score of 570. TRD [more]

The Obama administration’s $75 billion foreclosure prevention program has been widely criticized for its failure to, well, prevent very many foreclosures, and ProPublica has been investigating why the program has come up short. According to the publication, one major factor has been a possible “fatal” lack of oversight by the Treasury Department, which said this week that it doesn’t have the power under the Home Affordable Mortgage Program, known as HAMP, to punish mortgage servicers for denying loan modifications without cause. When the program was launched in 2009, the Treasury had promised to hit lenders with “monetary penalties and sanctions” if they didn’t make moves to clear their foreclosure backlogs. Since then, some officials have admitted that it was essentially all talk. “By every metric, the failure of the largest servicers to carry out the program is obvious,” said Alan White, a law professor at Valparaiso University. But they’re not being punished, he said, because “Treasury staff are preoccupied with friendly relations with the banks. Sometimes it seems the banks own Treasury.” [ProPublica]

A government evaluation of the Home Affordable Modification Program found it once again to be lacking, according to CNN. HAMP has undergone tweaks since it was introduced in April, but in a recent report, the Congressional Oversight Panel found little improvement in its performance. Instead of helping close to 4 million struggling mortgage borrowers keep their homes, HAMP will prevent only about 700,000 to 800,000 foreclosures. “I think the program has turned out to be a lot smaller and have a lot less impact than we thought it would,” said Ted Kaufman, the former U.S. senator from Delaware who is now chairman of the Congressional Oversight Panel. Since the Treasury Department lost the authority to further restructure the program at the end of October, banks are now offering more modifications through their own process rather than through the government’s. Among the reasons cited in the report for the program’s failure were that servicers were preventing or delaying modifications, and that many loans in trouble often came burdened with second mortgages, causing many banks to refuse to sign off unless they were paid. [CNN]

Record-low mortgage interest rates helped to further stabilize the housing market over the past month, according to the latest “Housing Scorecard” released by the Obama Administration yesterday. While new and existing home sales stuck at lower levels than those seen prior to the expiration of the homebuyer tax credit, prices have stopped slipping after 33 consecutive months of declines, the report says, and in the second quarter of 2010, U.S. homeowners gained $95 billion worth of home equity. TRD [more]

The number of successful mortgage modifications among defaulting borrowers under the federal government’s foreclosure avoidance program has dropped to its lowest monthly level since the initiative was rolled out last fall. Just 28,000 borrowers received modifications under the Making Home Affordable Program in September, the Treasury Department reported. Roughly 4.4 million households nationwide are reported to be in severe default. [NYT]

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The number of successful mortgage modifications among defaulting borrowers under the federal government’s foreclosure avoidance program has dropped to its lowest monthly level since the initiative was rolled out last fall. Just 28,000 borrowers received modifications under the Making Home Affordable Program in September, the Treasury Department reported. Roughly 4.4 million households nationwide are reported to be in severe default. [NYT]

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Unemployed mortgage holders will soon feel a little relief, according to National Mortgage News, thanks to a new federal program that began this month. Under the relief plan, borrowers who have been collecting unemployment benefits for at least three months can be afforded a forebearance plan that will defer their mortgage payments. All mortgage servicers will be required to participate in the Home Affordable Unemployment Program, affording forebearance to those mortgage holders who have not missed three or more payments. Borrowers whose loans are owned by Fannie Mae or Freddie Mac do not qualify for the program. [National Mortgage News]

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Poor oversight by the Treasury Department and errors by servicers has led to what may be thousands of homeowners being wrongly denied mortgage modifications under the Obama administration’s Home Affordable Mortgage Program, a government audit has revealed. According to the Government Accountability Office report, “15 of the largest 20 participating servicers [in HAMP] did not comply with various aspects of program guidelines,” when determining which borrowers were eligible for modifications. That determination is supposed to be made based on a calculation using factors like the borrower’s income and equity in the home, but the process is beset with errors, in part because the Treasury Department has failed to issue specific guidelines and standards for servicers to follow, the Huffington Post reported. The number of struggling homeowners rejected from HAMP in error “could range from a handful to thousands,” the report says, and yet the Treasury “has yet to establish specific consequences or penalties for noncompliance,” and has issued no fines. [Huffington Post]

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