Bank of America (NYSE:BAC) Claims Four Times the Number of Permanent, Modified Mortgages

Bank of America (NYSE:BAC) says it has now increased the number of permanent modified mortgages under the Home Affordable Modification Program (HAMP) to the tune of four times the number from the month before, now totaling a combined 12,700 for the last two months.

Also according to Bank of America, there are another 13,700 in the permanent loan modification pipeline awaiting the signature of the customers, and which have already been approved.

Among the requirements to qualify for a permanent loan modification is to take the time to complete the required documentation, which is much more challenging than it would seem, and also the borrowers must pay three straight monthly mortgage payments in order to begin the process.

The actual permanent loan modifications for January stood at about 9,500 under HAMP for Bank of America, with December’s total coming to 3,200, which gives us the 12,700 figure proffered by the banking giant. Added to prior modifications, that brings the overall total of their borrowers to an approximate 26,400 that have had their loans re-modified at the bank.

While some rightly criticized the pace the bank is moving with the loan modifications, the fact that they are by far the largest holder of mortgages in the United States makes their challenge more daunting, as the training process would be much longer in order to meet the larger need they face than their competitors.

Having said that, once that is in place, they should shoot past their competitors in sheer loan numbers being modified for the very same reason.

As measured by percentages though, Bank of America is significantly behind their key competitors like GMAC Mortgage, JPMorgan Chase and CitiMortgage, which, along with other financial institutions, have outperformed them.

More importantly for all the banks and their customers is whether these loan modifications are only delaying the inevitable for them, and if they can take hold and truly be permanent.

In the economic and political climate this inevitably and unfortunately had to happen, but when many of these default again, and the borrowers and lenders face the same situation, many will question at that time whether this program should have went forward in the first place.

But politicians, the banks, and the borrowers were all behind this, for a variety of reasons, and so in the end, there will be no one to blame but themselves when it again blows up in the faces of all those involved.

This isn’t to say it won’t work for some, as it will, it’s just that there hasn’t been much to change the economic circumstances surrounding all of this, and until that happens, this could re-cycle into another mortgage default nightmare.

At that point there will be no will to reignite the process and go through it all over again.