HOPE NOW: Foreclosure Starts Rose 6% In Q3

Posted by Patrick Barnard on November 25, 2014 No Comments
Categories : Mortgage Servicing

About 468,000 homeowners received non-foreclosure solutions from mortgage servicers during the third quarter, according to HOPE NOW, a voluntary, private-sector alliance of mortgage servicers, investors, mortgage insurers and nonprofit counselors.

Of those actions, about 109,000 were loan modifications and about 30,000 were short sales. Other solutions – including repayment plans, deeds in lieu, other retention plans and liquidation plans – made up the rest.

There were about 108,000 foreclosure sales for the quarter – down about 6% from the 115,000 recorded in the second quarter to reach the lowest level since HOPE NOW began tracking loan data in 2007. There were about 166,000 completed foreclosure sales during the third quarter of 2013.

Of the 109,000 loan modifications completed for the third quarter, about 79,000 were proprietary and 29,384 were through the Home Affordable Modification Program (HAMP).

Loan modifications were down about 40% compared to the approximately 181,000 processed in the third quarter of 2013.

As mentioned, short sales also continued to decline: There were about 30,000 short sales completed in the third quarter, a decline of about 9% compared to the approximately 33,000 completed in the second quarter and down about 56% compared to the 68,000 short sales processed in the third quarter of 2013.

Foreclosure starts, however, increased significantly. There were about 212,000 foreclosure starts in the third quarter, an increase of about 6% compared to the approximately 200,000 recorded in the second quarter, but down 27% compared to the approximately 290,000 recorded in the third quarter of 2013.

There were about 7,000 deeds in lieu recorded in the third quarter, down 4% from the 7,300 recorded in the second quarter.

Delinquencies of 60-plus days were approximately 1.89 million for the third quarter, a decline of about 10% compared to the 2.11 million delinquencies recorded in the third quarter of 2013.

Looking just at September, mortgage servicers offered approximately 150,000 total solutions, including about 34,000 permanent loan modifications completed. Of those, approximately 24,000 were proprietary loan modifications, while 9,559 were completed under HAMP. Total modifications for the month represented a 14% decrease compared to the approximately 39,000 offered in August.

Of the proprietary loan modifications completed in September, approximately 68%, or 17,000, had reduced monthly principal and interest payments of more than 10%.

There were about 35,000 foreclosure sales in September, an increase of 4% compared to the approximately 34,000 in August.

There were about 77,000 foreclosure starts in September, up 18% compared to the approximately 65,000 recorded in August. HOPE NOW's release doesn't offer any explanation for the recent rapid increase in foreclosure starts.

There were about 9,700 short sales in September, up about 4% compared to about 9,300 in August.

Eric Selk, executive director for HOPE NOW, says although the housing crisis is largely subsiding on a national level, ‘there are still pockets of the country in need of mortgage assistance.’

‘These areas include Detroit, St. Louis, southern California and Florida among others,’ Selk says in a statement. ‘HOPE NOW will focus its efforts on these markets that still face mortgage challenges. In addition to our signature homeowner events, we have taken an active role in community stabilization efforts with several of these cities. For example, we have worked closely with Detroit and Jacksonville on their community stabilization efforts.’

Selk notes that HOPE NOW will be participating in one more homeowner outreach event this year on Dec. 6 in the Tacoma, Wash., area.

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