HOPE NOW: 411,000 Workout Plans in 2Q

HOPE NOW reported mortgage lenders and servicers completed 411,000 non-foreclosure workout plans for homeowners during the second quarter, reflecting a continued slowdown in workout activity.  

HOPE NOW, a voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors of which the Mortgage Bankers Association is a founding member, said since 2007 the mortgage industry completed 24 million workout plans and six million proprietary loan modifications for homeowners, compared to six million foreclosure sales completed in the same period.  

The HOPE NOW 2nd Quarter Report said non-foreclosure actions outpaced completed foreclosure sales by a margin of more than four to one (411,000 workouts, vs. 89,000 foreclosure sales). For every one foreclosure sale, mortgage servicers offered 4.6 workout plans.  

HOPE NOW Executive Director Eric Selk said the data show “a consistent trend of non-foreclosure solutions outpacing completed foreclosure sales, which means that millions of families are receiving the help they need to avoid foreclosure. The picture shows that more homeowners have been helped by the industry than have gone through a completed foreclosure.”  

The 411,000 workouts compared to 444,000 in the first quarter, a decrease of 7 percent, and fell by 10 percent from a year ago (465,000). Foreclosure starts totaled 176,000 in the second quarter compared to 212,000 in the first quarter, a 17 percent decrease and a 13 percent decrease from a year ago (203,000).  

The report said permanent loan modifications in the second quarter totaled 113,000, compared to 116,000 in the first quarter, a decrease of 2 percent; and 10 percent decrease from a year ago (125,000). Of the 113,000 loan modifications completed, 78,000 homeowners received proprietary loan modifications and 35,738 homeowners received loan modifications completed under the Home Affordable Modification Program.  

Short sales totaled 24,000, a 31 percent decrease from a year ago (35,000). Deeds in lieu totaled 5,400 in the second quarter, a 28 percent decrease from a year ago (7,500). Delinquencies of 60+ days totaled 1.74 million in the second quarter, compared to 1.85 million in the first quarter, a decline of 6 percent and 1.98 million a year ago, a decline of 12 percent.  

Foreclosure sales also decreased from the previous quarter, to 89,000 from 96,000, a decrease of 7 percent. From a year ago, foreclosure sales fell from 117,000.  

For June alone, mortgage servicers offered 128,000 modifications, of which 34,000 permanent loan modifications completed. Of that total, 25,000 were proprietary loan modifications and 9,741 were completed under HAMP. Total modifications for the month were virtually unchanged from the previous month. Of proprietary loan modifications completed in June, 67 percent (17,000) had reduced monthly principal and interest payments of more than 10 percent.  

HOPE NOW reported foreclosure sales increased by 3 percent to 30,000 in June vs. 29,000 in May. Foreclosure starts fell by 2 percent to 58,000 in June vs. 59,000 in May. Short sales completed totaled 8,200 in June vs. 7,600 in May, an increase of 8 percent.  

The full data set can be found at www.hopenow.com.