Like some of you, perhaps, I looked at the as
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6WBXkVPCBt063A3KlVIMWFypYeH5p9ekS5PeaXprunM7LsncQ55Z9i06kQG7g8achfg_auypkSSFI6Hv2gcTmgLZWOzQOWHw_r9DU78wkjN9x8swQXEs7lAsDOZyCARJSLE5ISPdXaGU/s400/HAMP-redefault.jpg)
At HW, we chose not to run with the HAMP redefault numbers except to note that Treasury officials had added them into the latest report card. And this choice was made with purpose: we knew these numbers were fake. Nobody gets a 1.7% redefault rate 6 months after modification –- not even Uncle Sam — and any media outlet reporting that number with a straight face quite simply doesn’t understand the industry it’s covering.At least it makes sense now. I was starting to think that I couldn’t do math anymore…
The only way to come up with a 1.7% redefault rate is to change how redefaults are calculated. And that is precisely what our government did.
In the report card, buried in a footnote, is the following disclaimer: “a HAMP permanent modification is canceled for non-payment if it is more than 90 days delinquent.” It’s also apparently removed from redefault calculations, which is a great way to smear a pig in a mountain of lipstick and hope nobody notices.
The researchers at Barclays Capital were among the few paying attention to this footnote, and took the unprecedented step of issuing a separate research alert on the HAMP numbers last week, highlighting what they called “misleading” reporting by Treasury on HAMP mod performance.
I prefer to call it lying…
This article has been republished from Tim Iacono's blog, The Mess That Greenspan Made.
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