Proprietary Modifications Unchanged, Foreclosure Starts Rise

Servicers completed about 56,000 proprietary permanent loan modifications in the month of August – similar to their July efforts. Most of these modifications included reduced principal and interest payments and fixed interest rates for five years or more, according to HOPE NOW data released Wednesday. About 83 percent of proprietary modifications completed in August insured a fixed interest rate for at least five years, up from 76 percent in July. The same percentage of modifications included reductions in loan principal and interest in August. This is an increase of 3 percent from the previous month. About 68 percent offered homeowners a reduction of at least 10 percent on their principal and interest payments, up 8 percent from July. Are You Looking to Refinance? Don't wait! Lock in at record low rates. Start today and start saving. The total number of loan modifications completed since HOPE NOW began reporting data in 2007 has reached 4.86 million. Servicers completed more than 4.06 million of these modifications, while about 790,000 loans were modified under the government’s Home Affordable Modification Program (HAMP). HAMP’s August data has not yet been released. HOPE NOW reports about 690,000 loans have been modified this year. “HOPE NOW’s servicing partners continue to complete permanent loan modifications at a rate consistent with past months – in spite of tremendous negative impact of the continued housing and unemployment crisis,” Faith Schwartz, executive director of HOPE NOW, states. “And, in cases where modifications are not possible, the industry is working hard to educate at-risk homeowners about the options available to them,” Schwartz adds. While proprietary loan modifications remained level from July to August, foreclosure starts increased 18 percent, rising from 185,000 in July to 218,000 in August. Completed foreclosure sales also increased for the month, rising 5 percent from 65,000 to 68,000. The number of homeowners 60 or more days delinquent fell slightly from July to August, falling from 2.81 million to 2.80 million. HOPE NOW is an alliance of private sector mortgage industry professionals, including servicers, investors, mortgage insurers, and nonprofit counselors.