Private Banking Program Modifies More Loans than HAMP

April 1, 2010 - Washington - Banking institutions are patting themselves on the back for the performance of their private home-loan modification program, HOPE NOW. According to reports at HousingWire.com, the banking industry released new information on Wednesday showing that their private program has helped more homeowners than the federal program, Home Affordable Modification Program (HAMP).

Their numbers show that 95,586 homeowners across the country received loan modifications through HOPE NOW in February, compared to only 52,905 from the federal government's HAMP program. The numbers also show that most of the homeowners who received modifications through the HOPE NOW program received reductions in their principal, in addition to general interest reductions.

The HAMP program, on the other hand, has focused mainly on interest reductions since its start in March 2009. Last week, the Obama administration announced that the program would focus more on principal reductions to encourage more homeowners to participate.

Given the fact that more loan modifications were completed through HOPE NOW than HAMP, it raises questions about why banking institutions are more willing to grant mortgage modifications using HOPE NOW instead of the government's program.