Foreclosure starts and sales fell in April after an increase the month prior as servicers continued to struggle with large inventories of delinquent loans and settlement talks with regulators over the robosigning scandal dragged on.
Foreclosure starts totaled 162,860 in April, down 25% from March, while foreclosure sales fell 14% to 73,105, according to figures compiled by the Hope Now servicer alliance. (Alliance members service nearly 80% of all single-family loans in the U.S.)
Hope Now servicers also completed 57,000 proprietary (non-HAMP) modifications in April, compared to 76,600 in March.
In its April report, Hope Now disclosed re-default figures on proprietary loan modifications for the first time. The group said 19%, or 240,000 propriety (non-HAMP) modifications, are 90 days or more past due. The re-default rate has been fairly steady from May 2010 through April 2011, according to Hope Now executive director Faith Schwartz. "We are particularly encouraged by the stable trends of recidivism, or re-defaults, on loan modifications," she said.
The Hope Now re-default figures are based on loans that have performed satisfactorily for at least six months prior to default and includes loans up to 18 months old.
Quarterly servicing reports by the Office of the Comptroller of the Currency and Office of Thrift Supervision have consistently stated that HAMP modifications perform better than proprietary restructurings -- mainly due to deeper reductions in the borrowers' monthly mortgage payments.
