HOPE NOW: Mortgage Industry Completed 87,000 Permanent Loan Mods for Homeowners in February

Data Also Shows Declines in 60+ Days Delinquencies & Foreclosure Starts

WASHINGTON, DC – April 7, 2011 – (RealEstateRama) — HOPE NOW, the voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors, released its February 2011 loan modification data, which shows that an estimated 87,000 homeowners received permanent, affordable loan modifications from mortgage servicers for the month.

The reported data for February shows that, for the month, mortgage servicers completed approximately 61,000 proprietary loan modifications for homeowners and 26,147 Home Affordable Modification Program (HAMP) modifications (as reported by US Treasury Department), for an estimated total of 87,000.

Of the proprietary modifications completed, approximately 81% (49,000) included reduced monthly principal and interest payments. Additionally, proprietary loan modifications that reduced principal and interest payments by more than 10% represented 59% (36,000) of the monthly total.

The data for February also showed declines in both the 60+ days delinquency number (2.78 million, compared to 2.95 million for January) and the number of foreclosure starts (180,000 compared to 204,000 in January).

Here are some of the highlights of the February 2011 data:

• Total permanent loan modifications for the month were approximately 87,000, compared to 100,000 in January 2011.
o Approximately 61,000 were proprietary modifications.
o HAMP modifications totaled 26,147 for the month.
• Loan modifications with reduced principal and interest payments accounted for approximately 81% (49,000) of all proprietary modifications.
• Loan modifications with reduced principal and interest payments by 10% or greater accounted for approximately 59% (36,000) of all proprietary modifications.
• Fixed-rate modifications (initial fixed period of 5 years or more) accounted for 81% (49,000) of all proprietary modifications.
• Foreclosure starts for the month were 180,000, down from the 204,000 reported for January 2011.
• Completed foreclosure sales for the month were approximately 73,000, which was essentially unchanged from January 2011.
• 60+ days delinquencies for the month were 2.78 million, compared to 2.95 million in January 2011.

Faith Schwartz, Executive Director, issued this statement:

“Despite the numerous issues surrounding the loan servicing industry which have caused some delays in process, servicers and non-profit housing counselors continue to make progress in reaching at-risk homeowners, counseling at-risk homeowners, and offering alternatives to families facing foreclosure.

While we have seen a decline in overall modifications, we are pleased to see the serious delinquencies once again declined in the month of February, consistent with a trend we have seen in earlier months.

HOPE NOW remains focused on reaching borrowers earlier in the process and partnering with non-profit housing counselors to reach these homeowners, counsel them, and improve the customer experience.

Although loan modifications, forbearance and other home retention options are favorable outcomes, in some instances another alternative may be a graceful exit through a short sale or a deed in lieu offering.

It is important to note that servicers have new tools available to them, through recent Treasury and HUD programs that have been rolled out at the state level, for homeowners who are unemployed and unable to pay their mortgage. Our role at HOPE NOW is to make sure we are working with all available tools to preserve homeownership and avoid unnecessary foreclosures.

Along with our partners in 2011, HOPE NOW has held three face to face homeowner outreach events this year – in Las Vegas, San Jose and Phoenix, and we are gearing up for an event this month in Boston.

Through aggressive homeowner outreach activities nationwide and by use of new technologies, such as HOPE LoanPort®, our partners continue to get the message out to homeowners that there are free resources available to them. Three key resources are www.hopenow.com, the Homeowner’s HOPE™ Hotline, 888-995-HOPE™ and local non-profit housing counselors who act as a third party and can better assist a homeowner by working with a mortgage servicer on their behalf.”

HOPE NOW is the industry-created alliance of mortgage servicers, investors, counselors, and other mortgage market participants, brought together by the Financial Services Roundtable, Housing Policy Council and Mortgage Bankers Association, 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 or call the free Homeowner’s HOPE™ Hotline at (888) 995-HOPE™

Media Contacts:
Brad Dwin
(410) 303-6391

Faith Schwartz
(202) 589-2406