Barclays Capital has won its battle against Hamp stats.
BarCap analysts Sandeep Bordia and Jasraj Vaidya last week criticised the latest Hamp loan performance data, published on July 20 by the US Treasury. Their objection had to do with the way a key performance metric — the redefault rate for Hamp-modified mortgages — was being calculated.
In short, they said, it appeared the Treasury wasn’t counting permanent Hamp modifications that were more than 90 days delinquent in its stats, thus making the redefault rate look lower than it really was.
Fast forward a week — and the Huffington Post’s Shahien Nasiripour reports:
“Subsequent to releasing the report, Treasury received inquiries regarding the calculation methodology used in this table,” spokesman Mark Paustenbach said Tuesday. “These inquiries were related to the treatment of modifications that are cancelled from HAMP and ultimately become ineligible for TARP incentives after 90 days delinquency. “In an effort to review and better explain the methodology, we learned from our program administrator, Fannie Mae, that not all cancelled loans were included in the underlying information provided to Treasury,” Paustenbach continued.
“The error caused inconsistent reporting of permanent modifications during the snapshots reported. These omissions have impacted our previous analysis… with respect to the performance of HAMP permanent modifications.”
A Treasury official added that the agency had approved a methodology that included cancelled modifications, but Fannie Mae’s coding error led to those mods not being included in their calculation of re-default rates. The official added that Treasury will release the revised data when it’s confident in its accuracy.
We’re sure BarCap will be waiting with bated breath.
FT Alphaville’s Hamp coverage
Extend and pretend in US housing is reeeally extended – FT Alphaville
Hamp comedy: Requiring a death certificate for a modification edition – Rortybomb