Date from the month of August released by HOPE NOW shows that proprietary loan modifications continued at a steady pace compared with the previous month. Data showed that proprietary loan modifications have characteristics consistent with loans that support greater affordability and sustainability as the majority of these modifications have lower principal and interest payments and fixed interest rates of more than five years. Permanent proprietary loan modifications for August 2011 were approximately 56,000. Since HOPE NOW began reporting data in 2007, the mortgage industry has completed 4.86 million loan modifications for homeowners. This includes more than 4.06 million proprietary modifications and 791,399 completed under the Home Affordable Modification Program (HAMP) through July 2011.
“HOPE NOW’s servicing partners continue to complete permanent loan modifications at a rate consistent with past months—in spite of tremendous negative impact of the continued housing and unemployment crisis," said Faith Schwartz, executive director of HOPE NOW. "And, in cases where modifications are not possible, the industry is working hard to educate at-risk homeowners about the options available to them. The industry, and its non-profit and government partners, remains committed to using all of the tools available to assist families, whether they are home retention solutions, short term alternatives or other alternatives to foreclosure.”
►60-plus days delinquencies remained flat: According to the survey data, the inventory of 60 day plus delinquencies is 2.80 million for August 2011, virtually unchanged from the 2.81 million reported in July.
►Foreclosure sales and starts increased since July: Completed foreclosure sales for August 2011 increased five percent from the previous month (68,000 compared to 65,000). Foreclosure starts increased by 18 percent for the month (218,000 compared to 185,000).
"We understand that unemployment, medical hardships and other financial issues have deeply affected the nation’s homeowners," said Schwartz. “Many people have fallen behind on their mortgage payments. But it is important to continue to convey the message that mortgage servicers are working tirelessly with their customers. Whether it is through localized outreach events or regional bricks and mortar centers, there are opportunities for homeowners to get one on one mortgage assistance.”
Key data points for August 2011:
►Total permanent loan modifications for homeowners in 2011 are approximately 690,000 (an estimated 478,000 are proprietary loan mods and 211,749 have been completed under HAMP through July 2011-August TBD.
►Completed foreclosure sales were approximately 68,000, up from 65,000—an increase of five percent. Foreclosure starts were 218,000, up from 185,000—an increase of 18 percent.
►Sixty-plus-day delinquencies were 2.80 million, virtually unchanged from 2.81 million.
Data on proprietary loan modification characteristics (August 2011):
►Loan modifications with reduced principal and interest payments accounted for approximately 83 percent (46,000) of all proprietary modifications.
►Loan modifications with reduced principal and interest payments by 10 percent or greater accounted for approximately 68 percent (38,000) of all proprietary modifications.
►Fixed-rate modifications (initial fixed period of five years or more) accounted for approximately 83 percent (47,000) of all proprietary modifications.