Is anyone else sick of Hope Now referring to loan workouts as “foreclosure preventions?”
I say this because the re-default on loan modifications is staggeringly high, so it seems a bit of a stretch to say the foreclosure has actually been prevented just because the borrower got new terms on their mortgage.
Perhaps a better phrase would be “foreclosure postponement.” Anyways, Hope Now completed a record 239,000 workouts in December, with more than half actual loan modifications, not just simple repayment plans.
A total of 122,000 loan modifications were carried out during the month, 19 percent more than the previous record set last October.
Just over a third of prime borrowers received loan modifications, while 85 percent of subprime borrowers who received workouts in December got loan mods.
But foreclosures are showing no signs of slowing, with December starts up by 34,000 compared to one month earlier, with more than 75 percent of the increase tied to sparkling prime loans.
Actual foreclosure sales totaled 55,608 in December, with 917,964 for all of 2008, including 423,485 associated with prime loans.
Foreclosure sales totaled 204,943 in the fourth quarter of 2008, below numbers in linked quarters, but well above the 168,213 seen a year earlier.
In case you forgot, OCC head John Dugan said loan modifications were showing troubling signs of re-default just months after new terms were offered.
He said 36 percent of borrowers had re-defaulted after three months, 53 percent after six months, and 58 percent after eight months. What happens after 12 months?