Loan Workouts Slide as HAMP Implemented

September 2, 2009 No Comments »

loan modification

Foreclosure starts increased to 283,682 in July from 251,340 a month earlier, outnumbering the 253,673 workout plans offered to borrowers during that, according to foreclosure prevention group Hope Now.

Both repayment plans and loan modification plans slipped during the month, with the latter falling from 93,921 in June to 80,167; repayment plans declined to 173,506 from 211,882.

The alliance attributed the fall to the implementation of Obama’s Home Affordable Modification Program (HAMP); the Treasury reported that servicers initiated 230,000 trial modifications in July.

“Successful trial loan modifications that complete the 90 day Home Affordable Modification Program (HAMP) payment terms and completely documented as final modifications will be included in future HOPE NOW modification data,” the group said in a release.

“It is anticipated that modification numbers will increase in HOPE NOW industry survey reports in the coming months. The industry remains committed to the administration’s goal of completing 500,000 loan modifications by November 1, 2009.”

Completed foreclosure sales decreased slightly form 92,661 to 89,173 in July, but 60-day plus delinquencies climbed to 5.9 percent, representing 3.1 million homeowners.

Fewer than 40 percent of foreclosure starts resulted in a foreclosure sale last month, an improvement from the near-50 percent seen a year earlier.

Last month, 211,714 of the 283,682 foreclosure starts were considered “prime” loans; similarly, 59,341 of the 89,173 foreclosure sales were deemed prime.

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