HOPE NOW reports: 25 percent surge in loan workouts during June

HOPE NOW reports: 25 percent surge in loan workouts during June

July 29, 2009

HOPE NOW, the private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors, announced that in June, the mortgage lending industry helped 310,000 homeowners complete workout solutions to stay in their homes--a 25 percent increase over May In June, HOPE NOW members and the mortgage lending industry modified 96,000 mortgages compared to 101,000 in May, a 5.1 percent drop and initiated 214,000 repayment plans up from 148,000 in May, a 44.9 percent increase. Since January, 2009, more than 1.5 million homeowners have been helped through mortgage workout plans.
For a second straight month, HOPE NOW’s participating servicers in June reported a slight drop in modifications and a significant increase (over 40%) in repayment plans. This increase is primarily attributed to servicer participation in the Obama administration’s Home Affordable Modification program (HAMP).
“I am proud of the continued progress made by HOPE NOW Servicers and am confident that they are aggressively and proactively using HAMP, as well as other successful foreclosure prevention programs, to help as many homeowners as possible,” said Faith Schwartz, Executive Director of HOPE NOW Alliance. “We continue to work with the administration on the successful implementation and outcome of HAMP for at-risk homeowners. These efforts are in the best interest of consumers as well as the U.S. economy overall.”
There were 93,924 foreclosure sales in June, an increase of more than 13 percent from the prior month. For the first time since HOPE NOW began collecting data, prime foreclosure sales in June outpaced subprime sales by two-to-one. HOPE NOW survey data suggests a peak in subprime foreclosure sales occurred a year ago, Q2-2008. The largest gain in reported prime loan foreclosure sales occurred in the recently ended second quarter of 2009 at 154,108.
As HOPE NOW reported last month, the drop in the number of modifications and increase in repayment plans from May is largely attributed to the industry’s implementation of the Obama administration’s home retention program. Under the government requirements for the Home Affordable Modification program (HAMP), loans are subject to a three month trial period before a modification can be completed. Therefore, a number of workouts that will end up being modifications can currently only be reported as repayment plans or trial modifications. Many of these trial modifications will result in formal reporting of modifications after 90 days.
"The unique partnership between the mortgage servicing industry, investors, mortgage insurers, non-profit groups and the administration is productive and offers a great deal of hope and promise for the growing number of borrowers facing hardship,” said Schwartz. “As we all work together to help Making Home Affordable a success, servicers are using new technologies and partnerships to better streamline the process.
The HOPE NOW June data shows:
► 1.5 million homeowners have been helped with workouts since January 2009.
► Modification and repayment plans increased to 310,000.
► 60-day plus delinquencies increased from about 3.0 to almost 3.1 million.
► Foreclosure starts decreased slightly from 257,000 in May to 254,000 in June.
► Completed foreclosure sales increased from 83,000 in May to 94,000 in June.
HOPE NOW consumer outreach events have helped over 15,000 consumers since January 2009. Last week, HOPE NOW and its partners hosted an outreach event with administration and local officials in Las Vegas to help more than 1,500 at-risk homeowners meet directly with lenders and non-profit counselors to identify programs to address each homeowner's unique situation. The next outreach event will take place in Phoenix July 31 and Aug. 1.
For more information, visit www.hopenow.com.

Residential, Marketing, Settlement, Trends

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