Loan Modifications Help Recovery
According to a recent report from Hope Now and data from the U.S. Treasury Department, loan modifications are being credited with helping to strengthen the housing recovery by decreasing the number of delinquencies and foreclosures nationally.
Currently loan modifications can be acquired from mortgage servicers using proprietary programs or by using the government’s Home Affordable Modification Program (HAMP).
For the month of July mortgage servicers provided an estimated 50,000 homeowners with proprietary loan modifications, with an additional13,183 homeowners receiving HAMP modifications, according to data from the U.S. Department of Treasury.
The 63,000 plus modifications for July makes the number of permanent loan modifications total more than 6.6 million since 2007. During the same time period, approximately 5.36 million homeowners have received proprietary loans modifications.
So far this year the total number of loan modifications is approximately 519,000, this compared to an estimated 378,000 foreclosure sales reported for the year to date. Since HAMP began reporting in 2009, more than 1.2 million homeowners have received modifications through the federal program.
Data from the Hope Now report reveals that there has been a large annual decrease in foreclosure sales. In the first seven months of 2012 there were 485,000 foreclosure sales compared to 378,000 during the same period this year.
Hope Now Executive Director Eric Selk says, “Loan modifications and short sales continue to outpace foreclosure sales. Through the first seven months of the year there have been approximately 80,000 less foreclosure sales compared to the same time period in 2012.”
However, data shows that foreclosure sales increased for the month of July, with approximately 59,000 foreclosure sales completed. This figure is up 14% from the previous month of June, when 52,000 sales were completed. Foreclosure starts rose slightly also, with approximately 102,000 recorded in July compared to 98,000 in June, an increase of about 5%.
Short sales remained unchanged at approximately 26,000 on a monthly basis. Since the beginning of the Hope Now initiative in 2009, an estimated 1.32 million short sales have been completed.