HOPE NOW: Loan Mods Up 2% In Q1 But Down Year Over Year

Posted by Patrick Barnard on June 06, 2016 No Comments
Categories : Mortgage Servicing

About 319,000 homeowners received non-foreclosure solutions from mortgage servicers during the first quarter – an increase of 5% compared with about 303,000 in the fourth quarter of 2015 but a decrease of 26% compared with about 432,000 in the first quarter of 2015, according to HOPE NOW, a voluntary, private-sector alliance of mortgage servicers, investors, mortgage insurers and nonprofit counselors.

Of the 319,000 non-foreclosure solutions, about 86,000 were permanent loan modifications – an increase of 2% compared with about 85,000 in the fourth quarter but a decrease of 26% compared with 117,000 in the first quarter of 2015.

About another 118,000 were formal repayment plans – an increase of 6% compared with 112,000 in the fourth quarter. The remainder comprised other solutions, including short sales, deeds-in-lieu, other retention plans and liquidation plans.

Of the 86,000 loan modifications completed during the first quarter, about 62,000 were proprietary, while 24,329 were through the federal government’s Home Affordable Modification Program (HAMP), which is slated to end on Dec. 31.

The report shows that non-foreclosure solutions outpaced completed foreclosures by a pace of about 3.5 to 1.

There were about 179,000 foreclosure starts during the first quarter – an increase of 14% compared with about 156,000 in the fourth quarter but a decrease of 17% compared with the first quarter of 2015.

There were about 91,000 foreclosure sales – an increase of 19% compared with about 76,000 in the fourth quarter but a decrease of 5% compared with about 95,000 in the first quarter of 2015.

There were about 19,000 short sales completed during the first quarter – a decrease of 19% compared with about 23,000 in the first quarter of 2015.

There were about 5,300 deeds-in-lieu – a decrease of 9% compared with 5,800 in the first quarter of 2015.

About 1.72 million delinquencies (60 days or more past due) were reported during the first quarter – a decrease of 11% compared with about 1.92 million during the first quarter of 2015.

Looking just at the month of March, mortgage servicers offered approximately 119,000 non-foreclosure solutions, of which about 32,000 were permanent loan modifications.

Of these, about 24,000 were proprietary loan modifications and 8,551 were completed under HAMP. Total modifications for the month represented an 18% increase from February.

There were about 29,000 foreclosure sales in March – an increase of 4% compared with about 28,000 in February.

There were about 59,000 foreclosure starts during the month – a decrease of 5% compared with about 62,000 in February.

There were about 7,500 short sales completed in March – an increase of 40% compared with about 5,300 in February.

“Activities to help families avoid foreclosure remained strong during the first quarter,” says Eric Selk, executive director for HOPE NOW, in a release. “[About] 3.5 solutions [were] offered for every foreclosure. This points to a strong set of tools to address and cure delinquency. Permanent modifications increased slightly from the previous quarter, while short-term solutions, such as repayment plans and retention plans, increased significantly. Early intervention and direct contact with the borrower has clearly made a huge impact in the overall delinquency numbers. Our data indicates that both permanent and short-term solutions remain available to those who are struggling with their mortgage.”

Selk adds that mortgage servicers have “remained aggressive” in their efforts to proactively reach at-risk borrowers.

“As HAMP sunsets at the end of the year, it is critical for all homeowners who are experiencing difficulty with their mortgage to reach out for assistance,” he says. “We also applaud the Treasury for its announcement to extend the Hardest Hit Funds. These programs provide an important tool when helping families in local markets.”

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