Home/Mortgages/Proprietary Loan Mods Outnumber HAMP Mods by Two-to-One in 2011

February 17, 2012 (Shirley Allen)

Total permanent loan modifications declined by 40 percent from 2010 to 2011 with completed proprietary modifications nearly double those completed by the government’s HAMP program according to HOPE NOW, the voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors

Approximately 1.05 million loan modifications were completed in 2011 compared to 1.76 million in 2010, a decline of 40 percent. Proprietary loan modifications out numbered government efforts through the Home Affordable Modification Program (HAMP) by almost two-to-one with mortgage servicers completing 694,677 modifications compared to 353,677 under HAMP.

A total of 55,687 homeowners received permanent, proprietary loan modifications in December compared to 56,948 in November, a decline of 2.2 percent.

Of the proprietary loan modifications completed, 82 percent (45,407) included reduced monthly principal and interest payments, with 77 percent (43,003) receiving a reduction of more than 10 percent. In addition, 81 percent (45,034) received fixed interest rate loans of five years or more.

Loan modifications under the federal government’s HAMP program declined from November to December with government agencies completing 23,374 loan modifications in December compared to 26,877 in November.

A total of 79,061 proprietary loan modifications and HAMP loan modifications were completed in December, 5.7 percent lower than the 83,825 loan modifications completed in November.

Faith Schwartz, Executive Director of HOPE NOW, stated, “2011 was yet another challenging year for the nation’s housing market and the economy in general. However, great strides continue to be made on behalf of at-risk families across the country. Since 2007, more than five million permanent, sustainable solutions have been offered and in the past two years, almost three million have been done.”

Monthly foreclosure starts increased in December with 168,853 starts recorded, compared to 165,547 in November, a gain of 2.0 percent. Completed foreclosure sales declined from 70,626 in November to 69,616 in December. For all of 2011, there were 2,265,989 foreclosure starts and 842,777 foreclosure sales. It was the second consecutive year that loan modification efforts exceeded the number of homes lost to foreclosure.

Mortgage delinquencies that are at least 60 days past due increased from 2.766 million loans in November to 2.793 million in December.

“While HOPE NOW’s data shows that total loan mods for 2011 were less than the number completed last year, it is important to note that foreclosure sales dropped by more than 21% from 2010. That is very significant in that it reinforces the assertion that the industry, and its various partners, has worked hard to ensure that every homeowner in trouble is apprised of all available options before going to foreclosure sale,” Schwartz added.

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