| 22% of private mortgage mods redefault |
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Nearly 11% of mortgages modified under the government's Home Affordable Modification Program, known as HAMP, have fallen two months behind in payments, according to a banking regulators' report issued Friday. By contrast, just more than 22% of non-HAMP adjustments redefaulted.The reason for the gap is pretty clear, regulators said. HAMP modifications reduce a borrowers' monthly payment by an average of $608, while bank modifications lower it only by $307."There is a correlation between sustainability of payment and the reduction in the payment," said Joe Evers, deputy comptroller at the Office of the Comptroller of the Currency, which put out the report along with the Office of Thrift Supervision.Under HAMP, eligible borrowers can have their monthly payments lowered to 31% of their pre-tax income as long as its more profitable for the bank to modify the loan than to foreclose. The federal government pays servicers an incentive to participate in the program. [Read the full article] 
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