South Orange County Blog from Bob Phillips

HOPE NOW: Proprietary Loan Modifications Up 43% in July

Posted in Distressed properties, Foreclosures, Loan modifications by southorangecounty on September 6, 2012

This article was originally from DSNews.com, written by Tory Barringer.  9/5/2012

The number of homeowners who received permanent, affordable proprietary loan modifications jumped up 43 percent from June to July, HOPE NOW reported Wednesday.

The voluntary, private sector alliance of mortgage professionals and non-profit counselors released its July 2012 loan modification data, revealing that an estimated 66,002 homeowners received proprietary loan modifications in July, an increase from 46,208 in June.

The group’s report did not include loan mods completed under HAMP, as that data had not yet been released by the Treasury at the time of writing. Year-to-date through June, an estimated 110,144 homeowners had received HAMP modifications.

( Note from Bob Phillips. Many people point to the administration’s HAMP program as not being a success, but without that program’s guidelines, the more widely successful HOPE NOW program wouldn’t have had its continued improvement.)

For the month of July, proprietary loan mods that included fixed interest rates of five or more years accounted for 96 percent of the total. Mods with reduced principal and interest monthly payments made up 77 percent of the total, while mods with reduced principal and interest payments of more than 10 percent accounted for 71 percent of total proprietary mods.

Meanwhile, proprietary loan modifications with 90-plus day delinquency hit the lowest level in HOPE NOW’s recorded data. The re-default rate for modified loans fell to 8.9 percent of the total loan pool, a substantial drop from 10.3 percent in June.

Delinquencies of 60 days declined to 2.47 million in July, down from 2.52 million in June.

The data also showed that short sales continued to have a significant impact on the market. July saw 36,260 short sales, bringing the total of short sales since 2009 up to 974,000. The combination of loan mods and short sales brought the total number of permanent, non-foreclosure solutions up to approximately 6.63 million.

Faith Schwartz, executive director of HOPE NOW, said the increase in modifications illustrates the efforts of industry, non-profit, and government groups on behalf of homeowners.

“HOPE NOW has always been about collaboration, aggressive outreach to borrowers, and education on options,” Schwartz said. “Our data, which has been collected monthly for five years, continues to support these activities, and our members remain active in helping families find sustainable and realistic mortgage solutions.”

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