The Real Deal Miami

GMAC bests peers in permanent loan mods

February 23, 2010 01:22PM

While lenders have notoriously struggled over the past year to convert three-month trial mortgage loan modifications to permanent fixes under Obama’s Home Affordable Modification Program, GMAC has a noticeably better track record than its peers. As of January, 17.5 percent of the delinquent mortgages it had serviced had become permanent modifications. Overall, lenders have granted permanent modifications to only 3.4 percent of participants in the three-month HAMP trials. GMAC’s superior performance in this realm may have a lot to do with its documentation requirements. The the former financial arm of General Motors, now under government control, requires homeowners to submit all paperwork before diving into a trial modification. Most others wait until the end of the three-month period to collect it, but beginning June 1, GMAC’s method will become law. The Treasury Department is requiring all servicers to gather the documents prior to granting trial modifications in order to avoid beginning the process with borrowers who ultimately won’t be able to come up with the paperwork. [USA Today]