HOPE NOW REPORTS 25 PERCENT SURGE IN LOAN WORKOUTS DURING JUNE

HOPE NOW reports more homeowners completed workout solutions to stay in their homes in June. (Source: Brad Nwin, www.hopenow.org)

HOPE NOW REPORTS 25 PERCENT SURGE IN LOAN WORKOUTS DURING JUNE

HOPE NOW, the private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors, announced today that in June the mortgage lending industry helped 310,000 homeowners complete workout solutions to stay in their homes – a 25 percent increase over May.

In June, HOPE NOW members and the mortgage lending industry modified

96,000 mortgages compared to 101,000 in May, a 5.1 percent drop and initiated 214,000 repayment plans up from 148,000 in May, a 44.9 percent increase. Since January, 2009, more than 1.5 million homeowners have been helped through mortgage workout plans.

For a second straight month, HOPE NOW’s participating servicers in June reported a slight drop in modifications and a significant increase (over 40%) in repayment plans. This increase is primarily attributed to servicer participation in the Obama administration’s Home Affordable Modification program (HAMP).

“I am proud of the continued progress made by HOPE NOW Servicers and am confident that they are aggressively and proactively using HAMP, as well as other successful foreclosure prevention programs, to help as many homeowners as possible,” said Faith Schwartz, Executive Director of HOPE NOW Alliance. “We continue to work with the administration on the successful implementation and outcome of HAMP for at-risk homeowners. These efforts are in the best interest of consumers as well as the U.S. economy overall.”

There were 93,924 foreclosure sales in June, an increase of more than 13% from the prior month. For the first time since HOPE NOW began collecting data, prime foreclosure sales in June outpaced subprime sales by two-to-one. HOPE NOW survey data suggests a peak in subprime foreclosure sales occurred a year ago, Q2-2008. The largest gain in reported prime loan foreclosure sales occurred in the recently ended second quarter of 2009 at 154,108.

As HOPE NOW reported last month, the drop in the number of modifications and increase in repayment plans from May is largely attributed to the industry’s implementation of the Obama administration’s home retention program. Under the government requirements for the Home Affordable Modification program (HAMP), loans are subject to a three month trial period before a modification can be completed. Therefore, a number of workouts that will end up being modifications can currently only be reported as repayment plans or trial modifications. Many of these trial modifications will result in formal reporting of modifications after 90 days.

'The unique partnership between the mortgage servicing industry, investors, mortgage insurers, non-profit groups and the administration is productive and offers a great deal of hope and promise for the growing number of borrowers facing hardship,” said Schwartz. “As we all work together to help Making Home Affordable a success, servicers are using new technologies and partnerships to better streamline the process.

The HOPE NOW June data shows:

• 1.5 million homeowners have been helped with workouts since January, 2009

• Modification and repayment plans increased to 310,000

• 60 day plus delinquencies increased from about 3.0 to almost 3.1 million.

• Foreclosure starts decreased slightly from 257,000 in May to 254,000 in June.

• Completed foreclosure sales increased from 83,000 in May to 94,000 in June.

HOPE NOW consumer outreach events have helped over 15,000 consumers since January 2009. Last week, HOPE NOW and its partners hosted an outreach event with administration and local officials in Las Vegas to help more than 1,500 at-risk homeowners meet directly with lenders and non-profit counselors to identify programs to address each homeowner's unique situation. The next outreach event will take place in Phoenix July 31 and August 1.

HOPE NOW is the industry-created alliance of mortgage servicers, investors, counselors, and other mortgage market participants that has developed and is implementing a coordinated plan to help as many homeowners as possible prevent foreclosure and stay in their homes. For more information, go to www.HopeNow.com.

The Homeownership Preservation Foundation, a HOPE NOW member, created and operates the Homeowner’s HOPE™ Hotline, which is available 24 hours a day, 7 days a week, and 365 days a year. The Homeowner’s HOPE™ Hotline received 1.1 million calls in 2008. There is no cost to homeowners for contacting a nonprofit counselor by calling 888-995-HOPE.

# # #

BORROWER LOAN WORKOUT PLANS

2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 Jun-09 Jul 2007-Jun 2009

('Life to Date') Totals

Repayment Plans 357,900 348,531 314,453 302,565 335,152 345,078 340,384 502,595 214,756 2,846,658

Prime 154,383 160,127 148,814 141,840 179,864 203,752 215,778 342,534 143,587 1,547,091

Subprime 203,517 188,404 165,639 160,725 155,288 141,327 124,606 160,061 71,170 1,299,567

Modifications 72,773 133,467 170,216 220,349 256,188 314,602 370,436 318,044 96,046 1,856,076

Prime 29,714 36,634 48,148 56,202 70,503 92,125 121,011 128,093 40,316 582,429

Subprime 43,058 96,833 122,068 164,147 185,685 222,477 249,425 189,951 55,730 1,273,646

Workout Plans 430,673 481,998 484,669 522,914 591,340 659,680 710,820 820,639 310,803 4,702,733

Prime 184,097 196,761 196,961 198,042 250,367 295,877 336,788 470,627 183,903 2,129,521

Subprime 246,575 285,237 287,708 324,872 340,973 363,803 374,032 350,012 126,900 2,573,213

FORECLOSURE SALES

2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 Jun-09 Jul 2007-Jun 2009

('Life to Date') Totals

Foreclosure Sales 153,408 168,213 203,503 246,192 263,326 201,603 201,314 239,303 93,924 1,676,862

Prime 60,699 64,958 83,352 108,202 130,700 101,519 113,309 154,108 62,603 816,849

Subprime 92,709 103,255 120,151 137,990 132,626 100,084 88,005 85,196 31,321 860,014

(Workout Plans = Repayment Plans + Modifications)

Repayment Plans: A plan that allows the borrower to become current and catch up on missed payments that are appropriate to the borrower’s circumstances, which involves deferring or rescheduling payments but the full amount of the loan is expected ultimately to be paid.

Modifications: A modification occurs any time any term of the original loan contract is permanently altered. This can involve a reduction in the interest rate, forgiveness of a portion of principal or extension of the maturity date of the loan.

Your code to embed this article on your website* :

*You are allowed to change only styles on the code of this iframe.

Comments

Add your Comment

Featured - 30 Year Fixed Mortgage Rates 2019

Lender APR Rate (%) Points Fees Monthly
Payment
Learn More
AimLoan.com
NMLS ID: 2890
License#: MC-3098
3.523% 3.500% 0.25 $732 $1,123 Learn More
Quicken Loans NMLS #3030
NMLS ID: 3030
4.990% 4.990% 0.00 $0 $1,341 Learn More
Rocket Mortgage
NMLS ID: 3030
4.875% 4.875% 0.00 $0 $1,324 Learn More