This is depressing. Turns out the brightest part of the HAMP report, the low re-default rate, was subject to a miscalculation.

“In an effort to review and better explain the methodology, we learned from our program administrator, Fannie Mae, that not all cancelled [sic] 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 [sic] 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.

…

Meanwhile, last month analysts at Fitch Ratings projected that as many as 75 percent of HAMP modifications will ultimately result in re-default — despite the lower monthly payments. In their note last week, the Barclays analysts said they’re sticking to their original re-default projection of about 60 percent.

(via CalculatedRisk)