Although the pace of loan modification activity slowed from the first to the second quarter this year, foreclosure starts saw an even greater quarterly decline, according to data from HOPE NOW, a private sector alliance of mortgage servicers, investors, mortgage insurers and nonprofit counselors.
In the second quarter, servicers provided 204,000 loan modifications to distressed borrowers, down by about 16 percent from the prior quarter. However, loan modifications were still up 13 percent from a year ago.
Short sales, another alternative to foreclosure, decreased 25 percent year-over-year to 81,000 in the second quarter.
Meanwhile, foreclosures were initiated on 329,000 properties in the second quarter. The total for foreclosure starts represents a 30 percent decrease compared to the first quarter and a sharp 38 percent decline from last year.
Foreclosure sales also slowed, dropping to 158,000 in the second quarter, down 2 percent from the first quarter and down 15 percent from the same quarter a year ago.
HOPE NOW data continued to show a significant majority of completed modifications are through the private sector. Out of the 204,000 completed modifications in the second quarter, 160,000 were proprietary modifications, while 44,860 were completed under the government’s Home Affordable Modification Program (HAMP).
Since 2007, about 6.52 million homeowners have received permanent loan modifications for homeowners, and about 5.31 million of those modifications were proprietary programs.
The industry has also provided 1.32 million short sales since December 2009. This brings the total for non-foreclosure solutions to over 7.84 million.
“In addition to the progress made via our solution data, HOPE NOW has sponsored over 140 face to face events in more than 70 markets nationwide and has been a driving force in bringing together all mortgage stakeholders in the interest of improving the nation’s housing market,” said Eric Selk, executive director of HOPE NOW.
By Esther Cho