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US mortgage modification trend improves in December

WASHINGTON: The Obama administration's main housing rescue program showed further signs of stabilization in December as those receiving permanent mortgage modifications during the month outnumbered those dropped from the program.

The Treasury Department on Monday Jan 31 said 30,030 homeowners received permanent loan modifications in December under the Home Affordable Modification Program, or HAMP, slightly above the 29,972 that received permanent modifications in November.

A total of 18,448 borrowers were cut from both permanent and trial modifications in December about the same level as in November and less than the month's tally of new permanent modifications.

For much of 2010, dropouts had outnumbered new permanent modifications as documentation requirements became more stringent.

However, 792,529 borrowers had been dropped from the program through December, or about 54 percent of the 1.47 million modifications that had been started since the program was launched in 2009.

The Treasury data showed that there were about 521,630 borrowers that had received a permanent modification at the end of December, compared to about 505,000 at the end of November and 483,000 at the end of October.

But this was far short of the administration's initial goals of helping 3 million to 4 million homeowners, a goal that has since been scaled back. Under the tougher guidelines put in place last year, about 1.42 million borrowers were eligible for the program.

The Treasury also released new data about the borrowers who are receiving loan modifications under the program. The median gross annual income for a homeowner entering a trial modification was $46,344, while the median loan balance for those starting a trial modification was US$223,283.

The top five metropolitan areas for active permanent modifications were Los Angeles, with 6.9 percent of the total volume, New York with 6.1 percent, Riverside-San Bernardino with 5.4 percent, Chicago with 5.3 percent and Miami-Fort Lauderdale with 4.6 percent.- Reuters

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