September 1, 2011 (Shirley Allen)
The number of proprietary loan modifications rebounded in July after a 7.5 percent decline in June according to HOPE NOW, the voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors. Meanwhile, foreclosure starts and sales declined and mortgage delinquencies climbed upwards.
The organization reports that 55,687 homeowners received permanent, proprietary loan modifications in July compared to 50,283 in June, an increase of 11 percent. Almost 4.8 million proprietary loan modifications and Home Affordable Modification Program (HAMP) loan modifications have been completed since 2007.
Of the proprietary loan modifications completed, 80 percent (44,413) included reduced monthly principal and interest payments, with 60 percent (33,302) receiving a reduction of more than 10 percent. In addition, 87 percent (44,402) received fixed interest rate loans of five years or more.
The number of loan modifications completed under the federal government’s Home Affordable Modification Program (HAMP) for July had not been reported yet, but based on current trends, about 30,000 modifications were probably completed.
Total proprietary modifications and HAMP modifications for July were about 85,000, exceeding the 81,903 modifications in June.
Monthly foreclosure starts declined in July with 185,076 starts recorded, compared to 194,310 in June, a decline of 5 percent. Completed foreclosure sales dropped from 72,570 in June to 64,578 in July, a decline of 11 percent.
Mortgage delinquencies that are at least 60 days past due increased from 2.75 million properties in June to 2.81 million in July.
July’s data also shows that 80 percent of previous permanent proprietary loan modifications remained less than 90 days past due in the last year. This was the fifth consecutive month that 90 days past due loan performance has remained at that level.
Faith Schwartz, Executive Director of HOPE NOW, stated, “We are happy to see an increase in permanent proprietary loan modifications for the month of July. More encouraging is the significant drop in foreclosure sales and starts, which is directly related to the extraordinary amount of work that is being done to educate at-risk homeowners about their options. Loan modifications continue at a steady rate, and in cases where that option is not possible mortgage servicers and housing counselors have the ability to offer a wide range of other solutions.”
Tags: HOPE NOW, private sector alliance, mortgage servicers, loan modifications, fixed rate mortgages, delinquencies, proprietary modifications, foreclosure starts, foreclosure sales