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HOPE NOW: Foreclosure preventions by industry on pace for record numbers

National Mortgage Professional
Mar 24, 2014

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.

Published
Mar 24, 2014