Home Front

A blog about the economy and the Sacramento-area real estate market.

May 17, 2010
Permanent loan modifications rising slowly in Sacramento
Slightly more than 5,000 struggling borrowers in El Dorado, Placer, Sacramento and Yolo counties have received permanent mortgage modifications, reports the newest look at April loan modification data from the U.S. Treasury Department.
Another 380 borrowers in Yuba and Sutter counties have gotten the permanent modifications.

The data suggest that ever more people are getting their loans permanently modified through interest rate cuts, longer payback periods and temporary suspension of payments. But the number of people in trial modification payments - the pipeline leading to permanent modifications - is apparently falling. Some fear this may mean fewer people will get help in the longer run.

Here is five months of data showing how permanent modifications are rising:
                         Sacramento MSA                  Yuba City MSA
Dec. 2009          1,156                                            90
Jan. 2010            2,078                                          159   
Feb.                   2,921                                           213
March                 3,882                                           296
April                    5,019                                          380

(Sacramento MSA: El Dorado, Placer, Yolo, Sacramento counties)
(Yuba City MSA: Yuba and Sutter counties)

Here now is the number of active trial modifications in place by month. As you can see these numbers are falling locally. Home Front hasn't been able to analyze this fully yet, but it would seem to suggest that fewer people are getting into the modification process period. That seems to follow some of the criticism implied in articles that the government loan's modification program is running out of steam.

 Is this how you're reading  it?

Here's the number of loans in trial modification programs in recent months (usually for three to six months, a test period for possible permanent modifications).
                                  Sacramento MSA                  Yuba City MSA
Dec. 2009                        11,848                                 908
Jan. 2010                         12,346                                 941
Feb.                                 12,450                                 956
March                               11,653                                 884
April                                   9,624                                  727

According to the report most of these permanent modifications are reducing monthly payments by an average of $500. They include lowered interest rates, longer periods to pay off the loan and temporary suspension of payments.

Source: Making Home Affordable Program

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