Private Loan Mods Up 10 Percent in June
Get widgets
Print
Facebook
RSS- By:
- Peter King | August 17, 2010
Private sector mortgage loan modifications rose 10 percent in June, more than doubling the number of modifications completed through the government’s Home Affordable Modification Program (HAMP), according to new figures from the Hope Now Alliance.
The industry completed about 123,000 proprietary loan modifications in June, according to Hope Now, compared to just over 51,000 HAMP modifications reported by the U.S. Treasury Department. All told, Hope Now reports that nearly 3.4 million homeowners have obtained permanent loan modifications since June 2007.
Most loan modifications done privately
Just under 400,000 of those have been HAMP modifications, with the rest private propriety loan modifications conducted under lender’s own guidelines. Roughly half the nearly 3 million private loan modifications were performed before the first permanent loan modifications were finalized under HAMP, which was launched in spring 2009.
“HOPE NOW’s June data continues to show the mortgage industry’s commitment to keeping as many homeowners as possible in their homes,” said Faith Schwartz, senior advisor to Hope Now. “We saw significant increases across the board in permanent loan modifications as well as other solutions.”
4 in 5 include principal/interest reductions
About 78 percent of proprietary mortgage loan modifications performed in the first half of the year included reductions of principal and/or interest rates, enabling homeowners to obtain lower monthly payments. One of the criticisms that had been leveled at lenders in the earlier stages of the foreclosure crisis was that many proprietary modifications actually increased homeowner’s monthly mortgage payments, in return for forgiving or deferring delinquent payments.
Currently, proprietary loan modifications are typically offered to homeowners only after they are unable to qualify for a government-backed HAMP modification. The HAMP modifications have stricter guidelines than the proprietary ones, whose guidelines are determined by the lenders themselves.
10 million workouts since 2007
Hope Now reports that the industry has offered a total of 10 million workout solutions to at-risk homeowners since 2007, including proprietary and HAMP loan modifications, repayment plans, forbearances and other foreclosure-prevention options. The figure includes multiple solutions offered to individual homeowners; the report did not offer data on how many of those workouts subsequently ended in foreclosure.
The Hope Now Alliance did report a 7 percent decline in foreclosure starts, from 205,479 in May to 191,764 in June, and a 9 percent decrease in completed foreclosure sales over the same period, from 98,963 to 90,350. However, more recent figures from the foreclosure data firm RealtyTrac have shown those figures increasing in July.
Hope Now is a cooperative effort by the U.S. government, mortgage lenders, investors, housing counselors and mortgage insurers established to help stem the foreclosure crisis. It was established in 2007 as the result of an initiative by the Bush Administration.
Call For Rates
800-419-1494
Speak to a lender now.
We will match calls to our toll free number with our network of lenders.Modify My Loan
National Rates
| Loan Type | Today | +/- |
|---|---|---|
| 30 yr fixed | 3.72 |
|
| 15 yr fixed | 3.03 |
|
| 5/1 ARM | 2.75 |
|
Rates may contain points
Browse Mortgage Rates
Featured Guides
Browse our comprehensive guides to popular topics related to mortgage and personal finance.