HOPE NOW: Servicers provided nearly 1.2 million loan workouts since July 2007MortgagePress.comHOPE NOW, loan workouts, mortgage servicers,
From July 2007 through February 2008, mortgage servicers have
provided loan workouts that have enabled about 1.2 million
homeowners to stay in their homes, according to the most recent
study by HOPE NOW.
HOPE NOW servicers, covering almost two-thirds of the mortgage
industry for both prime and subprime loans, provided the data. The
study estimates that on an industry-wide basis:
•Servicers provided loan workouts for about 1,178,000
homeowners since July 2007.
•In January and February 2008, servicers provided
approximately 309,700 prime and subprime loan workouts, including
196,200 repayment plans and 113,500 loan modifications.
Loan modifications for 2008 have been 48% of all subprime loan
workouts, which is more than double the 2007 rate.
The industry is dedicated to minimizing foreclosures, said Faith
Schwartz, executive director of HOPE NOW. While HOPE NOW is not the
only answer to this issue, the alliances outreach efforts have had
a significant impact on encouraging consumers to connect with their
servicers. We are seeing real results.
Please click here
for the summary table.
Hybrid ARM resets
On Dec. 6, the American Securitization Forum announced a plan to
fast-track solutions for subprime ARM borrowers who could afford
their starter rate but could not afford the reset rate. This plan
has minimized foreclosures for borrowers who could afford their
starter rate. With recent reductions in short-term interest rates,
the reset shock has become much smaller than it was in December, so
far fewer homeowners need modifications to avoid unaffordable
resets.
Preliminary results, representing 45 percent of the market, on
subprime ARM workouts and foreclosures for loans resetting in
January and February are as follows:
•There were 140,562 subprime 2/28 and 3/27 loans that were
scheduled to reset in January or February 2008.
•Of the loans that were current at reset, only 60 have
entered the foreclosure process.
•5,607 of these loans have been modified and more than 60%
were modified for 5 years or more.
•60,000 of these loans (43 percent) were paid in full through
refinancing or sale.
With short-term interest rates declining dramatically in the
last few months, many homeowners are receiving new fixed rates much
like the rates prior to any potential reset. These homeowners'
monthly payments are holding steady and there is no payment shock.
Any remaining loans are still eligible for a loan by loan review,
said Schwartz.
For more information, visit visit www.HOPENOW.com.
