Servicers provided nearly 74,000 modifications for distressed homeowners in May, up from 70,000 in April, according to data from HOPE NOW, an alliance of mortgage servicers, investors, mortgage insurers, and nonprofit counselors.
This raises the total for modifications to 6.47 million since 2007, which is when HOPE NOW began keeping track.
The majority of modifications were proprietary, or private sector modifications. Out of the 6.47 million mods, 5.26 million were proprietary, while 1.2 million were through Home Affordable Modification Program (HAMP), HOPENOW reported Tuesday.
Of 74,000 modifications in May, 58,000 were proprietary, while over 15,500 were part of the government’s HAMP.
In May, proprietary mods exhibited characteristics of affordability, with 84 percent providing reduced principal and interest payments.
Additionally, 80 percent of the mods reduced principal and interest by more than 10 percent.
Short sales also ticked up in May, rising slightly to 28,000, up from 27,000 in April. Since 2009, the industry has provided about 1.29 million short sales to help homeowners avoid foreclosure.
When combining modifications and short sales, the two foreclosure prevention actions reached 102,000 in May.
Meanwhile, foreclosure sales fell 19 percent to 48,000 in May, down from 59,000 in April. At the same time, foreclosure starts dipped by 2.5 percent to 115,000.
“The combination of permanent loan modifications and short sales outpaced foreclosure sales significantly in the month of May,” said Eric Selk, executive director of HOPENOW. “This is a good trend as we see positive steps being made in the recovery of the housing market each month. Mortgage servicers continue to improve their processes and offer more options to at-risk homeowners than ever before, and the results are evident.”
By Esther Cho