Home/Mortgages/Total Loan Modifications Increase by 11 Percent in September

November 21, 2011 (Shirley Allen)

Proprietary loan modifications declined by almost 10 percent from August to September according to HOPE NOW, the voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors. Meanwhile, loan modifications through the federal government’s HAMP program surged 58 percent.

A total of 50,391 homeowners received permanent, proprietary loan modifications in September compared to 55,828 in August, a decline of 9.7 percent.

Of the proprietary loan modifications completed, 84 percent (42,519) included reduced monthly principal and interest payments, with 70 percent (35,069) receiving a reduction of more than 10 percent. In addition, 82 percent (41,484) received fixed interest rate loans of five years or more.

Loan modifications under the federal government’s Home Affordable Modification Program (HAMP) surged 57.8 percent from August to September with government agencies completing 40,141 loan modifications in September compared to 25,434 in August.

A total of 90,532 proprietary loan modifications and HAMP loan modifications were completed in September, 11.4 percent higher than the 81,262 loan modifications completed in August.

Since HOPE NOW began reporting data in 2007 and through the end of September, an estimated 4.97 million proprietary and Home Affordable Modification Program (HAMP) loan modifications have been completed, of which an estimated 4.11 million were proprietary loan modifications and 856,974 have been loan modifications completed under HAMP.

Faith Schwartz, Executive Director of HOPE NOW, stated, “When HOPE NOW started reporting data at the end of 2007, loan modifications were barely measurable. Homeowners either paid their mortgages or forfeited their homes. However, over the past four years the housing crisis has taught us to re-think helping distressed homeowners through an unprecedented level of collaboration, funding, manpower and expanded resources. Five million hard working American families have been able to prevent foreclosures through permanent loan modifications.”

Monthly foreclosure starts fell in September with 196,694 starts recorded, compared to 217,955 in August, a decline of 9.6 percent. Completed foreclosure sales increased slightly from 67,663 in August to 67,970 in September.

Mortgage delinquencies that are at least 60 days past due increased from 2.796 million loans in August to 2.813 million in September.

“The housing crisis is far from over. The industry, and its partners in the non-profit counseling community and the government, remains committed to reaching out to struggling homeowners, improving the customer experience and embracing new technology,” Schwartz added.

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