Hope Now: Foreclosure Starts Hit Record High

April 30, 2009 No Comments »

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Foreclosure alliance Hope Now completed 249,000 loan workouts in March, up slightly from the 244,000 a month earlier.

A total of 134,000 loan modifications and 115,000 less favorable repayment plans were carried out during the month.

Repayment plans still fall under the “workout” umbrella, but may increase the principal balance of the loan as well as the monthly mortgage payment, so it’s hard to call them solutions.

Loan modifications, on the other hand, may involve an interest rate reduction, forgiveness of a portion of principal, or an extension of the maturity date of the loan.

Unfortunately, foreclosure starts increased from 243,000 in February to 290,000 in March, the highest number since Hope Now began tracking data in 2007.

Conversely, completed foreclosure sales declined by 39 percent from February, dropping to 53,000 from 87,000, the lowest total since December 2007.

Hope Now’s chief statistician Michael Bright said the sharp reduction in completed foreclosure sales in March may have been the result of servicers allowing troubled loans to be run through the Homeowner Affordability and Stability Program.

“It’s too early to say this is a trend,” he said, in a release. “But anecdotal reports from servicers do indicate that they are taking this extra step to help homeowners who qualify stay in their homes.”

Prime borrowers accounted for more than half of the foreclosure sales completed during the month, the second consecutive month they have outnumbered subprime-related foreclosures.

Look for a spike in foreclosure sales in the coming months now that these moratoria are coming to an end.

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