Foreclosure sales continue to decline and loan modifications remain nearly the same month-over-month, according to Hope Now’s May mortgage industry data.
Despite May foreclosure starts rising to 176,000 compared to 163,000 in April, the Washington-based alliance of mortgage servicers, investors, insurers and non-profit counselors said foreclosure sales nationwide were approximately 68,000 in May, down 5,000 from the previous month. This represents a 7% month-over-month decrease.
At the same time, permanent loan modifications were approximately 85,000 for the second consecutive month.
Out of this total, there were nearly 32,300 modifications under the Home Affordable Modification Program, up more than 3,500 from April, while proprietary modifications were down to 53,000, a decrease of 4,000 from the previous month.
According to the data, 78% of all the proprietary loan modifications have reduced principal and interest payments and 88% had a fixed interest rate of five or more years, translating into “affordable and sustainable loan modifications for homeowners.”
Delinquent loans of more than 60 days also remained relatively flat for the third straight month at 2.67 million, compared to 2.65 million in April, while 90-day delinquencies experienced a modest 1% increase to 244,000 from 240,000.
Faith Schwartz, executive director of Hope Now, said one of the main reasons why mortgage servicers have completed more than 4.6 million loan modifications since 2007 is because of tools and government programs available to help distressed homeowners, including the Department of Housing and Urban Development’s Emergency Homeowner Loan Program, the U.S. Treasury’s Hardest Hit Fund, and the announcement of forbearance for up to 12 months or more for unemployed borrowers who are currently in an FHA loan program.
“These programs geared towards unemployed borrowers are increasingly important as the nation’s unemployment rate hovers around 9%,” Schwartz said. “Going forward, the industry, and its partners, remains committed to comprehensive homeowner outreach, improved customer experience, use of new technology and expansive education about all of the options available to struggling homeowners.”
