Loan Modifications Increase as Foreclosure Sales Decrease

HOPE NOW, the voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors, has released its July 2016 loan modification data which stated for the month of July, total non-foreclosure solutions (the combination of total loan modifications, short sales, deeds in lieu and workout plans) were approximately 112,000. This compares to approximately 25,000 completed foreclosure sales for the month. The report states that this is a ratio of more than four mortgage solutions for every foreclosure sale.

“As we turn to the second half of 2016, we remain pleased with the commitment of mortgage servicers to assist homeowners who are facing mortgage issues,” Eric Selk, Executive Director of HOPE NOW. “Our latest data report indicates that while delinquency continues to decline to pre-crises norms, there still remains a population of homeowners who need assistance. While our July 2016 data declined in many solution fields compared to the previous month, we are encouraged by the decline of actual foreclosures.”

The report states that included in that total solutions figure were an estimated 35,000 permanent loan modifications. This total includes modifications completed under both proprietary programs and the government’s Home Affordable Modification Program (HAMP). Of the permanent loan modifications completed in the month of July, the report shows that an estimated 23,000 were through proprietary programs and 12,081 were completed via HAMP. Additionally, of the 23,000 proprietary modifications completed in July, 46 percent, or 10,437, reduced the monthly principal and interest payment by 10 percent or more. Since HOPE NOW began reporting data in 2007, the total number of non-foreclosure solutions is over 25 million and the number of permanent loan modifications is 7.9 million.

“When looking at our July 2016 data compared to a year ago, completed modifications actually increased, so despite various conditions, the situation of thousands of homeowners improved,” says Selk. “The 112,000 foreclosure alternative solutions in July 2016 brings the life to date total since 2007 to approximately 25.5 million solutions. This is nearly four times the number of completed foreclosure sales (6.5 million) in the same time frame.”

Approximately 35,000 loan modifications were reported to be completed in July in contrast with 42,000 in June of 2016. This is a decrease of approximately 17 percent. Likewise, approximately 35,000 loan modifications were completed in July 2016 compared to 34,000 in July 2015. This was a reported increase of approximately 3 percent.

The report also states that approximately 5,700 short sales were completed in July 2016 compared to 6,300 in the month prior. This represents a decrease of approximately 10 percent. Short sales were reported to have approximately 5,700 completed in July 2016 in contrast to 7,700 in July 2015, a decrease of 26 percent.

Approximately 1,400 deeds in-lieu were completed in July. This is a 16 percent decrease from the 1,700 completed in June. Approximately 1,400 deeds in-lieu were completed in July 2016. This is a decrease of 6 percent from 1,500 in July 2015.

Foreclosure starts reduced 5 percent month over month to approximately 51,000 in July from 54,000 in June. Foreclosure starts were approximately 51,000 in July 2016 compared to 51,000 in July 2015. This number was reported to be virtually unchanged.

Additionally, foreclosure sales were reportedly about 25,000 in July from 29,000 in June. This was a decrease of 12 percent month over month. Likewise, foreclosure sales were approximately 25,000 in July 2016. This is compared to 28,000 in July 2015 which was a decrease of 9 percent.

“While the data trends certainly suggest that the market is recovering, there remains areas where assistance is still needed,” says Selk. “HOPE NOW continues to focus our efforts in several of these regions including Florida, Georgia, New Jersey and California.

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