Loanworkout.org and loansafe.org are committed to providing data from various sources that may help to ameliorate the foreclosure crisis in America. Loanworkout.org and loanSafe.org are consumer websites that never accept corporate donations or advertising dollars from the entities we monitor…we feel taking anything from them would undermine our objectivity.
Not everyone feels the same.
This week, HOPE NOW, published data from numerous servicers showing that over 100,000 loan modifications were made in January. HOPE NOW is a self described “alliance of mortgage servicers, non-profit counselors, and investors that has been working aggressively to prevent foreclosures and keep homeowners in their homes.” One question I would like to know the answer to pertains to bias. If HOPE NOW is a coalition of mortgage servicers, investors and a handful (perhaps) of non-profit counselors, should we pay serious attention to them?
Loanworkout.org will continue researching the nature of this coalition of servicers to see if they are nothing less than a public relations arm of mortgage servicers pumping positive propaganda to the masses.
From MSNBC:
HOPE NOW, the private sector alliance of mortgage servicers, non-profit counselors, and investors that has been working aggressively to prevent foreclosures and keep homeowners in their homes, today announced that its members and the larger mortgage lending industry modified 123,000 mortgages in January 2009. This is the first time since HOPE NOW began to compile data in July 2007 that the number of mortgage modifications exceeded 100,000 in 2 consecutive months.
HOPE NOW also announced that the industry initiated 125,000 formal repayment plans in January, which was equal to the record-high set in October 2008.
The combination of 123,000 mortgage modifications and 125,000 repayment plans means that, in January 2009, HOPE NOW members and the larger mortgage lending industry helped 248,000 at-risk homeowners (homeowners in danger of losing their homes) avoid foreclosure through one of these two “mortgage solutions.” This is a 4% increase over the record-high set in December 2008.
According to Faith Schwartz, HOPE NOW’s executive director, the January results demonstrate that the mortgage lending industry is continuing to expand its efforts to help homeowners. “In the midst of this ever-changing and extremely challenging mortgage crisis, HOPE NOW members continue to increase the number of homeowners they are helping and are trying hard to provide additional positive solutions,” she said. “The increasingly frequent use of modifications as the primary way to help homeowners is very likely to continue,” she added.
The HOPE NOW January data also shows:
– Modifications were approximately half of all solutions offered to homeowners. This is the first time this has happened in consecutive months.
– The number of foreclosures started in January increased by 14,000 over the previous month.
– Completed foreclosure sales increased from 56,000 in December to 68,000 in January.
“It’s clear that the mortgage problem is still growing,” Schwartz said. “That’s why HOPE NOW members are looking for additional ways to help homeowners and are working hard to assist the Obama administration implement its just-announced foreclosure-prevention initiative.”
For the first time since its inception, HOPE NOW began reporting additional “loan-level” data. This detailed information is the result of a HOPE NOW initiative that began several months ago to create a comprehensive database on mortgage delinquency and industry foreclosure prevention efforts. This loan-level data, which is a subset of our monthly survey data, is based on information from approximately 35 million loans.
The loan-level data will provide important and much-needed additional monthly information for the mortgage lending industry and policymakers to help at-risk homeowners.
The new loan-level data shows:
– Mortgage performance steadily declined each month in 2008. One in 10 loans was delinquent in some way by December.
– The number of loans 60+ days past due, which climbed each month over the past year, reached 2.9 million in January 2009.
– Both prime and subprime delinquencies rose over the past 18 months. Nearly 4% of all prime loans (including Alt A and Option Arm loans) are now seriously delinquent.
– Throughout 2008, the re-default rate ranged between 30% and 40%. (HOPE NOW defines a re-default as any mortgage that is 90 or more days delinquent or in foreclosure 6 months after the date it was first modified.)
– Almost 55% of all mortgage modifications are being made to mortgages owned by private label investors. Approximately 22% of all modifications are being made to mortgages held in bank portfolios. Slightly more than 17% of all modifications are being made to mortgages owned by Fannie Mae and Freddie Mac. About 3% of all modifications are being made to mortgages owned by Ginne Mae.
– In the 3rd quarter of 2008, nearly half of all mortgage modifications were for homeowners with FICO scores below 620.
– Approximately 25% of all homes lost to foreclosure were non-owner occupied, investor-owned buildings.
According to Michael Bright, HOPE NOW’s chief statistician, the loan-level data means that the industry will be in a better position to determine whether help is reaching the homeowners who most need it. “HOPE NOW has put together a comprehensive database to get a more accurate picture of who the at-risk homeowners are, how well the industry is doing, and what changes need to be made to best solve the foreclosure crisis,” he said.
A summary table of the results is shown below and can be found at Hope Now.
BORROWER LOAN WORKOUT PLANS
——————————————————-
2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4 Jan-09
——- ——- ——- ——- ——- ——- ——-
Repayment Plans 357,900 348,531 314,453 302,565 335,152 349,622 124,766
——- ——- ——- ——- ——- ——- ——-
Prime 154,383 160,127 148,814 141,840 179,864 203,171 77,399
——- ——- ——- ——- ——- ——- ——-
Subprime 203,517 188,404 165,639 160,725 155,288 146,451 47,367
——- ——- ——- ——- ——- ——- ——-
Modifications 72,773 133,467 170,216 220,349 256,188 322,105 123,409
——- ——- ——- ——- ——- ——- ——-
Prime 29,714 36,634 48,148 56,202 70,503 91,880 34,669
——- ——- ——- ——- ——- ——- ——-
Subprime 43,058 96,833 122,068 164,147 185,685 230,225 88,740
——- ——- ——- ——- ——- ——- ——-
Workout Plans 430,673 481,998 484,669 522,914 591,340 671,728 248,175
——- ——- ——- ——- ——- ——- ——-
Prime 184,097 196,761 196,961 198,042 250,367 295,051 112,069
——- ——- ——- ——- ——- ——- ——-
Subprime 246,575 285,237 287,708 324,872 340,973 376,677 136,106
——- ——- ——- ——- ——- ——- ——-
FORECLOSURE SALES
——————————————————-
2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4 Jan-09
——- ——- ——- ——- ——- ——- ——-
Foreclosure Sales 153,408 168,213 203,503 246,192 263,326 204,943 68,114
——- ——- ——- ——- ——- ——- ——-
Prime 60,699 64,958 83,352 108,202 130,700 101,230 30,413
——- ——- ——- ——- ——- ——- ——-
Subprime 92,709 103,255 120,151 137,990 132,626 103,713 37,700
Source: MSNBC
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