HOPE NOW has released its July 2012 loan modification data. An estimated 66,002 homeowners
received permanent, affordable loan modifications via proprietary programs from mortgage servicers during the month. This represents a 43 percent increase in proprietary loan modifications over the previous month (46,208). The reported data does not include loan modifications completed under the Home Affordable Modification Program (HAMP) for the month of July. That data has not yet been reported by U.S. Department of the Treasury for the month.
The July total of 66,002 proprietary loan modifications brings the total number of permanent loan mods since 2007 to 5.66 million. The figure for total loan mods includes proprietary loan modifications and HAMP loan modifications. HAMP figures are through June 2012. Since 2007, 4,619,054 homeowners have received proprietary loan modifications, while 1,043,471 homeowners have received HAMP modifications.
From January-July 2012, 340,826 homeowners have received proprietary loan modifications, and 110,144 homeowners have received HAMP modifications (through June 2012).
Loan modifications completed via proprietary programs once again showed characteristics of sustainability and affordability for homeowners. For the month of July:
►Proprietary loan modifications that included fixed interest rates of five years or more accounted for 96 percent (63,425) of the total.
►Proprietary loan modifications with reduced principal and interest monthly payments accounted for 77 percent (51,091) of the total.
Proprietary loan modifications with reduced principal and interest payments of more than 10 percent accounted for 71 percent (46,985) of the total.
The July data showed that proprietary loan modifications with 90-plus day delinquency (recidivism) hit the lowest level since HOPE NOW began reporting this data:
►Re-default rate was at 8.9 percent of the total loan pool for the month, compared to 10.3 percent for all modified loans as of the end of June.
►This percentage represents 82,333 total loans seriously delinquent six months after modification.
Short sales for July were 36,260, for a total of approximately 974,000 since 2009. The combination of loan modifications and short sales has brought the total number of permanent, non-foreclosure solutions to approximately 6.63 million.
Foreclosure sales were relatively flat for the month as 63,527 foreclosure sales were reported in July, compared to 63,810 in the month of June. Foreclosure starts were up five percent for the month as 164,593 foreclosure starts were reported in July, compared to 156,945 in the month of June.
"Encouraging was the lower number of re-defaults on loan modifications, which we attribute to the higher percentage of sustainable and realistic solutions being offered to homeowners," said Faith Schwartz, executive director of HOPE NOW. "The state of the economy, geography and modification program types are always contributing factors to the effectiveness of modifications. It is important to note that HOPE NOW defines re-defaults as loans that are 90-plus days delinquent after six months of completing a modification, using a rolling 18 month inventory of completed modifications."
