Residential servicers completed 60,900 proprietary modifications in February, down 15% from the prior month, as delinquencies and restructuring activity slowed, according to new figures released by the Hope Now alliance.
The number of non-HAMP, proprietary modifications declined to 261,450 units in the fourth quarter, compared to 346,900 in the third. All signs point to this trend continuing this spring.
The number of modifications fell 10% from December to 80,400 in January.
"While we have seen a decline in overall modifications, we are pleased to see serious delinquencies once again declined in the month of February, consistent with a trend we have seen in earlier months," said Hope Now executive director Faith Schwartz.
An Amherst Securities Group report notes that modification volume is "down dramatically" because most delinquent loans that can qualify have already been approved for a modification. Still, Amherst believes that there will be more borrowers going delinquent who can qualify for a modification in the future.
Also, ASG analysts expect to see a rise in "re-modifications" as borrowers default on a previous "unsuccessful" loan restructurings and qualify for a second modification. "We expect re-modification activity to rise," the Amherst report says.
