HOPE NOW report: Mortgage lending industry modified 123,000 mortgages in JanuauryMortgagePress.comHOPE NOW, loan modifications, foreclosures, formal repayment plans
HOPE NOW, the private sector alliance of mortgage servicers,
non-profit counselors, and investors that has been working
aggressively to prevent foreclosures and keep homeowners in their
homes, today announced that its members and the larger mortgage
lending industry modified 123,000 mortgages in January 2009. This
is the first time since HOPE NOW began to compile data in July 2007
that the number of mortgage modifications exceeded 100,000 in two
HOPE NOW also announced that the industry initiated 125,000
formal repayment plans in January, which was equal to the
record-high set in October 2008.
The combination of 123,000 mortgage modifications and 125,000
repayment plans means that, in January 2009, HOPE NOW members and
the larger mortgage lending industry helped 248,000 at-risk
homeowners (homeowners in danger of losing their homes) avoid
foreclosure through one of these two "mortgage solutions." This is
a four percent increase over the record-high set in December
According to Faith Schwartz, HOPE NOW's executive director, the
January results demonstrate that the mortgage lending industry is
continuing to expand its efforts to help homeowners. "In the midst
of this ever-changing and extremely challenging mortgage crisis,
HOPE NOW members continue to increase the number of homeowners they
are helping and are trying hard to provide additional positive
solutions, she said. The increasingly frequent use of modifications
as the primary way to help homeowners is very likely to
The HOPE NOW January data also shows:
" Modifications were approximately half of all solutions offered
to homeowners. This is the first time this has happened in
" The number of foreclosures started in January increased by 14,000
over the previous month.
" Completed foreclosure sales increased from 56,000 in December to
68,000 in January.
"It's clear that the mortgage problem is still growing,"
Schwartz said. "That's why HOPE NOW members are looking for
additional ways to help homeowners and are working hard to assist
the Obama administration implement its just-announced
For the first time since its inception, HOPE NOW began reporting
additional "loan-level" data. This detailed information is the
result of a HOPE NOW initiative that began several months ago to
create a comprehensive database on mortgage delinquency and
industry foreclosure prevention efforts. This loan-level data,
which is a subset of our monthly survey data, is based on
information from approximately 35 million loans.
The loan-level data will provide important and much-needed
additional monthly information for the mortgage lending industry
and policymakers to help at-risk homeowners.
The new loan-level data shows:
" Mortgage performance steadily declined each month in 2008. One
in 10 loans was delinquent in some way by December.
" The number of loans 60-plus days past due, which climbed each
month over the past year, reached 2.9 million in January 2009.
" Both prime and subprime delinquencies rose over the past 18
months. Nearly four percent of all prime loans (including Alt-A and
Option Arm loans) are now seriously delinquent.
" Throughout 2008, the re-default rate ranged between 30 percent
and 40 percent. (HOPE NOW defines a re-default as any mortgage that
is 90 or more days delinquent or in foreclosure 6 months after the
date it was first modified.)
" Almost 55 percent of all mortgage modifications are being made
to mortgages owned by private label investors. Approximately 22
percent of all modifications are being made to mortgages held in
bank portfolios. Slightly more than 17 percent of all modifications
are being made to mortgages owned by Fannie Mae and Freddie Mac.
About three percent of all modifications are being made to
mortgages owned by Ginne Mae.
" In the 3rd quarter of 2008, nearly half of all mortgage
modifications were for homeowners with FICO scores below 620.
" Approximately 25 percent of all homes lost to foreclosure were
non-owner occupied, investor-owned buildings.
According to Michael Bright, HOPE NOW's chief statistician, the
loan-level data means that the industry will be in a better
position to determine whether help is reaching the homeowners who
most need it. "HOPE NOW has put together a comprehensive database
to get a more accurate picture of who the at-risk homeowners are,
how well the industry is doing, and what changes need to be made to
best solve the foreclosure crisis."
A summary table of the results is attached and can be found by
For more information, visit www.hopenow.com.