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58 needing or seeking to leave their homes to avoid foreclosure have received assistance with a short sale or deed-in-lieu of foreclosure under the Home Affordable Foreclosure Alternatives (HAFA) Program. HAMP homeowners save a median of almost $500 a month on their mortgage bill—a reduction of approximately 36 percent of their before-modification monthly payment. Homeowners with second lien modifications realize an additional median monthly savings of $154 on their second lien. To date, homeowners with HAMP first lien modifications have saved an aggregate of approximately $28.8 billion compared with their unmodified mortgage obligations. In addition, more than 200,000 homeowners have received some form of forgiveness on their principal mortgage balance, with a median principal reduction of more than $67,000. at translates to more than $14 billion in mortgage debt forgiven. Another 47,000 homeowners have received full or partial extinguishment of their second liens, realizing another $2.8 billion in forgiveness. Taken as a whole, these numbers represent substantial assistance to a large number of American homeowners. MHA focused eligibility criteria to ensure help goes to those with a demonstrated need for assistance and the best chance for sustained success. We have expanded programs where it makes sense—which is why, for example, we created a second-look "HAMP Tier 2" evaluation for those with expanded eligibility criteria and periodically enhanced programs for unemployed homeowners, for reducing principal mortgage balances, and for short sales and deeds-in-lieu. For homeowners seeking help, however, evaluation under MHA is just the first step servicers undertake. Servicers are required to evaluate for other options, including proprietary modifications; and for those not eligible for MHA, this required evaluation has often served as a gateway to other assistance programs. ese alternative modifications often have meaningful payment reduction and many of the same benefits as a HAMP modification. LESSONS LEARNED What have government officials, mortgage servicers, housing counselors, nonprofits, and market observers learned these past six years about providing sustainable help to homeowners? We have seen that the performance of HAMP modifications has improved over time, with each year or vintage of modifications showing stronger performance at any given point in time than modifications started the previous year. e data also clearly show the longer a homeowner remains in HAMP without defaulting, the less likely that homeowner will default in the future. Looking at the track record of MHA, three lessons are clear. Lesson One: Payment affordability and getting to struggling homeowners early in their delinquency are critical to modification sustainability. Treasury has spent a lot of time trying to understand the most important factors driving modification performance and has closely tracked a number of factors linked to performance. HAMP data support, for example, the idea that the lower the level of delinquency at the time of modification, the lower the redefault rate. HAMP data also support the intuitive proposition that the size of payment reduction is a critical success factor. e incentives we pay in HAMP allow deeper reductions than most proprietary modifications, and this has been a key driver of program success. Studies by the Office of the Comptroller of the Currency (OCC) have found that homeowners in HAMP consistently exhibit lower delinquency and redefault rates than those in private industry modifications. e OCC attributes this to HAMP's emphasis on affordability of monthly payments, verification of income, and completion of a trial payment period. Over the past year, Treasury sought to dig deeper in comparing the performance of HAMP vs. non-HAMP modifications. Specifically, we compared HAMP modifications in 2010 and 2011 against modifications of loans held in private-label securitizations (PLS). Using sophisticated CUMULATIVE RE-DEFAULT RATE BY DELINQUENCY AT TIME OF MODIFICATION 90+ DAY DELINQUENCY RATE 60% 0% MONTHS POST MODIFICATION LESS THAN 30 DAYS 31-90 DAYS 91-120 DAYS 121-210 DAYS GREATER THAN 210 DAYS CUMULATIVE RE-DEFAULT RATE BY PERCENT REDUCTION IN MONTHLY MORTGAGE PAYMENT 90+ DAY DELINQUENCY RATE 60% 0% 12 18 24 30 36 42 MONTHS POST MODIFICATION LESS THAN 20% 20-30% 31-40% 41-50% GREATER THAN 50% 12 18 24 30 36 42

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