March 12, 2012 (Shirley Allen)

The first month of the New Year saw a surge in foreclosure starts with over 31,000 more homeowners seeing their properties fall into the foreclosure process in January than in December, and for the first time since October 2009, foreclosure sales outpaced loan modifications.

Monthly foreclosure starts jumped 18.7 percent from December to January, climbing from 168,853 to 200,447, according to HOPE NOW, the voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors.

Completed foreclosure sales increased from 69,616 in December to 78,734 in January, outpacing proprietary loan modifications and HAMP loan modifications which posted a 6.7 percent decline, falling from 79,061 loan modifications completed in December to 73,767 in January.

A total of 55,775 homeowners received permanent, proprietary loan modifications in January virtually unchanged from the 55,687 in December.

Of the proprietary loan modifications completed, 67 percent (37,547) included reduced monthly principal and interest payments, with 63 percent (35,106) receiving a reduction of more than 10 percent. In addition, 89 percent (49,845) received fixed interest rate loans of five years or more.

Loan modifications under the federal government’s HAMP program declined from December to January with government agencies completing 17,992 loan modifications in January compared to 23,374 in December.

Faith Schwartz, Executive Director of HOPE NOW, stated, “HOPE NOW and its members have charged full speed into 2012 in the ongoing collaborative efforts to assist at-risk homeowners. Loan modifications continue at a steady pace and proprietary mods continue to show real signs of sustainability and affordability for homeowners. This is important to note, as these characteristics are vital to housing market recovery.”

Mortgage delinquencies that were at least 60 days past due declined from 2.793 million loans in December to 2.768 million in January.

Tags: HOPE NOW, private sector alliance, mortgage servicers, loan modifications, fixed rate mortgages, delinquencies, proprietary modifications, foreclosure starts, foreclosure sales