The pace of loan modifications has quickened in recent months. According to data from Hope Now, modifications made up 42.2% of total workout plans in June, or 76,000 modifications, compared with 18.6% in July last year, or 23,000 modifications.
About 220,000 modifications were completed in the second quarter, as opposed to 64,000 in the same period last year.
Modification less of a loss
According to research by FBR Capital Markets, the projected loss severity for a bank from a loan modification was 12%, compared with 42% in case of foreclosure.