HOPE NOW: Foreclosure preventions by industry on pace for record numbersMortgagePress.comHOPE NOW, mortgage workouts, foreclosure, Faith Schwartz, hybrid ARMs
HOPE NOW, the private sector alliance of mortgage servicers,
counselors and investors that is working to help prevent
foreclosures, announced that mortgage servicers helped
approximately 170,000 homeowners avoid foreclosure in May 2008. If
this monthly rate has continued through June, the mortgage lending
industry will help approximately 519,000 homeowners in the second
quarter of 2008 avoid foreclosure and stay in their homes, the
largest number of workouts in any quarter since HOPE NOW began to
compile data in July 2007.
Since July 2007, HOPE NOW estimates that more than 1.7 million
homeowners have avoided foreclosure because of industry
efforts.
"The May report demonstrates that HOPE NOW is helping homeowners
avoid foreclosure," said HOPE NOW Executive Director Faith
Schwartz. "As promised, the industry has accelerated the pace at
which it is helping homeowners."
The HOPE NOW report estimates that on an industry-wide
basis:
• The total number of foreclosures prevented by mortgage
servicers since July 2007 has risen to more than 1.7 million.
• Mortgage servicers provided loan workouts for
approximately 170,000 at-risk borrowers in May.
• Approximately 100,000 of the prime and subprime loan
workouts provided by mortgage servicers in May were repayment
plans; approximately 70,000 were loan modifications.
A summary table of monthly and quarterly results is attached and
can be found
here.
The numbers reported by HOPE NOW differ from those recently
reported by the Office of the Comptroller of the Currency (OCC) and
are likely to differ from those expected to be reported soon by the
Office of Thrift Supervision (OTS). They may also differ from those
reported by other regulators.
The differences are the result of several factors. For example,
the OCC collects information from nine nationally-chartered banks,
the OTS collects information from six federally-chartered thrifts,
and HOPE NOW collects data from 22 companies with a variety of
charters and regulators. HOPE NOW members report approximately 38
million loans, substantially more than the number included in
either the OCC or OTS reports.
The purpose of the HOPE NOW survey is to estimate the effort by
the full mortgage lending industry to help homeowners avoid
foreclosures. That is why HOPE NOW extrapolates its results to
estimates of total industry activity. By contrast, OCC and OTS only
provide data from the largest chartered institutions within their
respective jurisdictions.
Such differences do not invalidate the information in any one of
the reports.
HOPE NOW, OCC, and OTS are working to develop a more uniform
reporting framework and set of data definitions so that, together,
they maximize the value of the information provided to the public
and policy makers.
"HOPE NOW is confident that the information it is receiving from
its members and the methods being used to compile its monthly
reports are reliable," Schwartz said. "More important, our reports
are an accurate picture of activity taking place in the broader
marketplace to provide alternatives to foreclosure."
Survey of hybrid adjustable rate mortgage
resets
HOPE NOW also announced today the results of a separate survey of
subprime adjustable-rate mortgages with rates resetting in 2008.
The results, reported by nine companies representing approximately
60 percent of subprime loans, are as follows:
• Approximately 718,000 subprime loans were scheduled to
reset between January and May 2008.
• 37,700 (5.3 percent) of these subprime loans have already
been modified. Nearly 64 percent of these modifications are for 5
years or longer.
• 323,000 (45 percent) of the subprime adjustable rate loans
that were originally scheduled to reset were paid in full when the
homeowner refinanced the loan or sold the property.
• A limited amount, 1,800 (0.5 percent), of the loans that
were current at their date of reset have started the foreclosure
process.
For more information, visit www.hopenow.com.
