November 1, 2010 Media Contacts: Brad Dwin (202) 589-1938 brad@hopenow.com Faith Schwartz (202) 589-2406 faith@hopenow.com HOPE NOW: Proprietary Loan Modifications for Homeowners Continue at a Steady Pace 120K Completed in September Total Permanent Loan Mods Now Top 1.4 Million for 2010 (WASHINGTON, DC) HOPE NOW, the private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors released its September 2010 survey data today, which estimates the industry completed close to 150,000 permanent loan modifications for the month. The reported data for September shows that mortgage servicers completed approximately 120,000 proprietary loan modifications for homeowners and 27,840 Home Affordable Modification Program (HAMP) modifications (as reported by US Treasury Department), for an estimated total of 147,000. The total number of loan modifications with principal and interest payment reductions declined slightly for the month of September (93,000 compared to 105,000 in August), but 78% of the total proprietary modifications completed in September provide a reduced monthly payment for homeowners. HOPE NOW is currently reporting additional metrics on types of proprietary modifications being offered to distressed homeowners in order to better assess sustainability. Since June 2010, HOPE Now estimates that loan modifications that provide homeowners with reduced principal and interest payments of 10% or more have accounted for 53% (255,000) of proprietary loan modifications in 2010.
Additionally, it is estimated that loan modifications with a fixed rate period of five or more years account for 80% (381,000) of all proprietary modifications done this year by mortgage servicers. This is significant when assessing the affordability and viability of loan modifications currently being provided by the mortgage industry. According to these latest estimates, mortgage servicers have completed 1.4 million loan modifications in 2010. Here are the notable highlights of the September 2010 monthly data (based on industry estimates): Proprietary loan modifications increased - 116,000 in August compared to 120,000 in September. For the month: o Principal and interest (P&I) reduction modifications completed were 93,000 (78% of the total). o There were 66,000 loan modifications with P&I reductions of more than 10% (55% of the total). o There were 98,000 loan modifications with a fixed rate period of 5 years or more (82% of the total). 60+ days delinquencies remained flat - 3.2 million in both August and September. Foreclosure starts increased slightly from 245,000 in August to 250,000 in September. Completed foreclosure sales increased from 102,000 in August to 120,000 in September Faith Schwartz, Senior Adviser for HOPE NOW, issued the following statement: The most important take away from HOPE NOW s September data is that we now have good metrics on the sustainability of proprietary loan modifications being done by our servicer members. While HAMP has provided a road map for other solutions, and is still the first line of defense for a delinquent homeowner, if the borrower is not eligible for a HAMP modification, a proprietary modification is able to fill the gap and offer a viable and sustainable solution to avoid foreclosure, enabling the borrower to stay in their home.
I cannot stress enough the importance of affordable and reasonable loan modifications as a crucial step in the stabilization of the housing market. Despite the fact, that there are still over three million homeowners behind on their mortgages, HOPE NOW is encouraged by the efforts of its servicer members as they continue to complete permanent loan modifications at a pace of about 150,000 per month. Mortgage servicers, along with non-profit housing counselors and government entities, will continue their aggressive borrower outreach programs that include localized face to face events, the Homeowner s HOPE Hotline, 888-995- HOPE and other efforts by individual servicers. Additionally, web-based loan modification solutions, such as HOPE LoanPort - currently used by 13 mortgage servicers and 360 housing counseling agencies representing 1,700 counselors in 47 states, the District of Columbia and Puerto Rico - continue to pick up steam and offer homeowners an easier way to submit loan modification applications and reach a faster decision on their mortgage.
HOPE NOW Q1 2010 Q2 2010 Jul 2010 Aug 2010 Sep 2010 Year to Date Total or Average Total Completed Modifications 469,381 499,103 157,046 149,098 147,425 1,422,054 HAMP Permanent Modifications 1 163,863 167,220 36,695 33,342 27,840 428,960 Proprietary Modifications Completed 2 305,518 331,883 120,351 115,756 119,585 993,094 Proprietary Modifications Completed Reduced P&I Modifications 234,796 262,958 103,029 104,988 93,411 799,182 % of Proprietary Modifications 77% 79% 86% 91% 78% 80% Fixed Rate Modifications 3 (initial fixed period of 5 years or more) N/A N/A 91,569 101,303 98,190 380,627 % of Proprietary Modifications N/A N/A 76% 88% 82% 80% Reduced P&I Modifications 3 (10% or greater) N/A N/A 59,028 64,481 65,758 254,620 % of Proprietary Modifications N/A N/A 49% 56% 55% 53% Foreclosure Starts 684,874 566,012 226,664 245,015 249,609 1,972,175 Foreclosure Sales 288,526 286,712 97,951 101,780 119,688 894,658 60+ Days Delinquency 4 3,944,479 3,605,377 3,298,236 3,256,682 3,255,768 3,606,695 1 Source Making Home Affordable. 2 Extrapolated. Modifications Completed was revised in December 2009 to include Current Modifications and specifically exclude HAMP. 3 Year to Date Total for this field begins in June 2010. 3 Monthly average. "Year to Date" Snapshot Industry Extrapolations and HAMP Metrics (January 2010 September 2010)
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 www.hopenow.com or call the free Homeowner s HOPE Hotline at (888) 995-HOPE. The following companies are members of the HOPE NOW Alliance: Acqura Loan Services American Home Mortgage Servicing, Inc. Assurant, Inc. Aurora Loan Services Bank of America Bayview Financial Carrington Mortgage Services, LLC Citigroup, Inc. Fannie Mae Freddie Mac First Horizon Home Loans Genworth Mortgage Insurance Corporation GMAC HomEq Servicing HSBC USA JPMorgan Chase Lender Business Process Services, Inc. Litton Loan Servicing
LoanCare Marathon Asset Management MetLife Home Loans MGIC Mortgage Electronic Registration System Nationstar Mortgage LLC Ocwen Loan Servicing OneWest Bank PMI Mortgage Insurance Company PNC Mortgage Quicken Loans Radian Residential Credit Solutions RoundPoint Financial Group Saxon Mortgage Services/ Morgan Stanley Select Portfolio Servicing, Inc. State Farm Insurance SunTrust Mortgage, Inc. Vericrest Financial Wells Fargo and Company ###