HOPE NOW: Proprietary Loan Mods for Homeowners Increased 43% in July

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1 September 5, 2012 Media Contacts: Brad Dwin (410) Faith Schwartz (202) HOPE NOW: Proprietary Loan Mods for Homeowners Increased 43% in July Re-default Rates Hit Lowest Recorded Level (WASHINGTON, DC) HOPE NOW, the voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors, released its July 2012 loan modification data. An estimated 66,002 homeowners received permanent, affordable loan modifications via proprietary programs from mortgage servicers during the month. This represents a 43% increase in proprietary loan modifications over the previous month (46,208). The reported data does not include loan modifications completed under the Home Affordable Modification Program (HAMP) for the month of July. That data has not yet been reported by United States Department of Treasury for the month. Total Loan Modifications Since 2007 at 5.66 Million The July total of 66,002 proprietary loan modifications brings the total number of permanent loan modifications since 2007 to 5.66 million. The figure for total loan modifications includes proprietary loan modifications and HAMP loan modifications. HAMP figures are through June Since 2007: 4,619,054 homeowners have received proprietary loan modifications. 1,043,471 homeowners have received HAMP modifications (Note: HAMP reporting began in 2009). From January July 2012: 340,826 homeowners have received proprietary loan modifications.

2 110,144 homeowners have received HAMP modifications (through June 2012). Proprietary Loan Mods Continue to Show Affordability Loan modifications completed via proprietary programs once again showed characteristics of sustainability and affordability for homeowners. For the month of July: Proprietary loan modifications that included fixed interest rates of five years or more accounted for 96% (63,425) of the total. Proprietary loan modifications with reduced principal and interest monthly payments accounted for 77% (51,091) of the total. Proprietary loan modifications with reduced principal and interest payments of more than 10% accounted for 71% (46,985) of the total. Re-defaults on Proprietary Loan Modifications at Lowest Recorded Level The July data showed that proprietary loan modifications with 90+ day delinquency (recidivism) hit the lowest level since HOPE NOW began reporting this data: Re-default rate was at 8.9% of the total loan pool for the month, compared to 10.3% for all modified loans as of the end of June. This percentage represents 82,333 total loans seriously delinquent six months after modification. Short Sales Continue to Impact the Market Short sales for July were 36,260, for a total of approximately 974,000 since The combination of loan modifications and short sales has brought the total number of permanent, non-foreclosure solutions to approximately 6.63 million. Foreclosure Sales Flat, Foreclosure Starts Increased Slightly Foreclosure sales were relatively flat for the month: 63,527 foreclosure sales were reported in July, compared to 63,810 in the month of June Foreclosure starts were up 5% for the month: 164,593 foreclosure starts were reported in July, compared to 156,945 in the month of June. Serious Delinquencies Down from June Delinquencies of 60 days declined to 2.47 million, compared to 2.52 million in June a decline of 2%. Delinquency data is extrapolated from data received by the Mortgage Bankers Association for the second quarter of The full data set for July 2012 is available at

3 Faith Schwartz, Executive Director, issued this statement: HOPE NOW has always been about collaboration, aggressive outreach to borrowers and education on options. Our data, which has been collected monthly for five years, continues to support these activities and our members remain active in helping families find sustainable and realistic mortgage solutions. The rise in the number of loan modifications during July is a direct result of the combined efforts of the industry, non-profit community and government on behalf of homeowners across the country. Also encouraging was the lower number of re-defaults on loan modifications, which we attribute to the higher percentage of sustainable and realistic solutions being offered to homeowners. The state of the economy, geography and modification program types are always contributing factors to the effectiveness of modifications. It is important to note that HOPE NOW defines re-defaults as loans that are 90+ days delinquent after six months of completing a modification, using a rolling 18 month inventory of completed modifications. HOPE NOW and its partners continue to assist homeowners, especially in markets where recovery has been slower. Outreach activities will continue throughout the year and into 2013 in these markets. Upcoming face to face events are scheduled for Detroit next week, Nashville in October, Orlando in November and Ontario, California in December. The challenges faced by military homeowners have been a huge focus for mortgage servicers and housing counselors as well, as these service members face a unique set of circumstances related to Permanent Change of Station (PCS). In the month of September, HOPE NOW and its military partners will host events at Fort Bragg, North Carolina and Fort Lewis, Washington.

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5 HOPE NOW is the industry-created alliance of mortgage servicers, investors, counselors, and other mortgage market participants, brought together by the Financial Services Roundtable, Housing Policy Council and Mortgage Bankers Association, that has developed and is implementing a coordinated plan to help as many homeowners as possible prevent foreclosure and stay in their homes. For more information go to or call the free Homeowner s HOPE Hotline at (888) 995-HOPE. ###