Number of homeowners helped in July 2008 sets another monthly record WASHINGTON, Aug. 27
WASHINGTON, Aug. 27 /PRNewswire-USNewswire/ -- HOPE NOW, the private
sector alliance of mortgage servicers, counselors, and investors that has been
working aggressively over the past year to prevent foreclosures today
announced that over 2 million homeowners have avoided foreclosure and have
been able to stay in their homes due to the unwavering efforts of HOPE NOW and
the broader mortgage industry.
HOPE NOW also announced that the number of foreclosures prevented in July
2008 was at a record high for the second consecutive month, and was 6 percent
higher than the number of foreclosures prevented in June. Compared to July
2007, the number of foreclosures prevented has increased by more than 54
percent.
In July 2008, HOPE NOW mortgage servicers helped homeowners avoid
foreclosure by completing more than 192,000 mortgage workouts. Workouts
include both modifications to the terms of existing mortgages and repayment
plans. All workouts are intended to be permanent changes that, barring a life
event such as a job loss, death, or illness, will enable the homeowner to stay
in the home as long as he or she wishes to do so.
"The industry's overwhelming commitment to helping homeowners avoid
foreclosure and stay in their homes is undeniable and steadfast," said HOPE
NOW's Executive Director Faith Schwartz. "Because of HOPE NOW's vast and
multifaceted efforts, more than 2 million families and the communities in
which they live are much better off today than they otherwise would have
been."
The HOPE NOW report estimates that on an industry-wide basis:
-- The total number of foreclosures prevented by mortgage servicers since
July 2007 has risen to nearly 2.07 million.
-- Mortgage servicers provided loan workouts for approximately 192,000
borrowers in July, an increase of 11,000 loan workouts over June.
-- Approximately 112,000 of the homeowners with prime and subprime
mortgages helped by servicers in July received repayment plans;
approximately 80,000 received loan modifications.
-- Nearly 52 percent of homeowners with subprime loans received
modifications.
A summary table of the results is attached and can be found at
http://www.hopenow.com/media/press_release.php.
According to Schwartz, the rapid pace of foreclosure prevention by HOPE
NOW members is likely to accelerate further in the coming months due to the
alliance's continuing efforts to reach out to millions of homeowners through
mailings, the HOPE Hotline, and the regional homeowner workshops it has been
holding around the country.
"At the same time Tropical Storm Fay was raging, more than 3,600 people
attended the homeowner workshops held in Florida last week," she said. "These
targeted efforts led by the HOPE NOW alliance clearly demonstrates the sheer
volume of homeowners that will continue to be helped in the coming months."
Because of several factors, the numbers reported by HOPE NOW differ from
those reported by the Office of the Comptroller of the Currency (OCC), the
Office of Thrift Supervision (OTS), and other regulators. For example, OCC
collects information from 9 nationally chartered banks, OTS collects
information from 5 federally chartered thrifts, and HOPE NOW collects data
from 23 companies with a variety of charters and regulators. HOPE NOW members
report approximately 38 million loans, substantially more than the number
included in either the OCC or OTS reports.
The HOPE NOW survey estimates the effort by the total mortgage lending
industry to help homeowners avoid foreclosure. By contrast, OCC and OTS only
provide data from the largest chartered institutions they oversee.
None of these differences invalidate the information in any of the
reports.
HOPE NOW also announced today the results of a separate survey of subprime
adjustable rate mortgages with rates resetting in 2008. The results, reported
by 9 companies representing approximately 60 percent of subprime loans, are as
follows:
-- Approximately 1.1 million subprime loans were scheduled to reset
between January and July 2008.
-- Since rates began to reset on these loans in January 2008, those loans
that were current at reset and subsequently started the foreclosure
process account for less than 1 percent of remaining loans.
-- Nearly 80,000 of these loans have been modified. Over 74 percent of
these modifications are for 5 years or longer.
-- 436,000 of the subprime adjustable rate loans that were originally
scheduled to reset during this period were paid in full when the
homeowner refinanced the loan or sold the property.
ABOUT HOPE NOW
HOPE NOW is an alliance between counselors, mortgage market participants,
and mortgage servicers to create a unified, coordinated plan to reach and help
as many homeowners as possible.
The Homeownership Preservation Foundation's HOPE Hotline (1-888-995-HOPE),
which is available 24 hours a day, 7 days a week, and 365 days a year,
receives an average of more than 4,000 calls a day. There is no cost to
homeowners for using the HOPE Hotline.
HOPE NOW coordinates a nationwide campaign to reach homeowners who may be
at risk of losing their homes. So far, HOPE NOW has sent almost 1.9 million
letters. About 18 percent of homeowners receiving the HOPE NOW-coordinated
letters have contacted their servicer, six times more than the routine 2-3
percent response rate servicers receive when they send their own mailings.
In the past seven months, HOPE NOW has connected thousands of homeowners
with their lender and/or a HUD-certified housing counselor at workshops in 20
different cities in California, Georgia, Illinois, Pennsylvania, Ohio, Nevada,
New Jersey, Texas, Wisconsin, Tennessee, Florida, Massachusetts, Florida and
Indiana. Additional workshops are being scheduled so that more troubled
borrowers can be helped.
In addition, HOPE NOW members recently agreed to make substantial
additional efforts to contact homeowners whose mortgages will reset in the
coming months and to further expedite the process used to determine how best
to keep them in their homes.
Foreclosure Starts
Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
Total 126152134143169169
Prime 51 61 55 63 65 76
Subprime 75 91 79 81103 92
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08
Total 168179179195192187197
Prime 78 82 90 95 96 96105
Subprime 90 97 89100 96 90 92
Completed Foreclosure
Sales
Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
Total 42 48 45 55 54 43
Prime 17 20 17 21 22 16
Subprime 25 29 28 33 32 26
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08
Total 70 67 66 80 85 80 92
Prime 30 27 26 35 37 36 44
Subprime 41 40 39 45 49 44 48
Completed Foreclosure Sales (Percentage of Starts)
There is a time lag between a foreclosure start and its completion.
During this time many foreclosure starts drop out for a variety of reasons.
The time lag varies for individual states, ranging between 2 and 12 months.
The percentages shown below adjust for this lag and are calculated by
multiplying the number of loans for each state by the average time from
foreclosure initiation to completed foreclosure sale, summing the results for
all states, and then dividing the aggregate by the total number of loans for
all states. The overall weighted average is approximately 5.4 months.
Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
Total 40.5% 45.5% 39.8% 45.2% 45.1% 32.5%
Prime 37.1% 44.8% 37.0% 43.1% 44.9% 29.7%
Subprime43.1% 45.9% 41.8% 46.7% 45.4% 34.5%
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08
Total 50.7% 47.6% 43.5% 49.2% 51.8% 46.8% 51.9%
Prime 52.5% 44.7% 41.2% 49.6% 48.5% 45.4% 52.8%
Subprime49.4% 49.8% 45.1% 49.1% 54.6% 47.9% 51.2%
Summary Loss Mitigation Statistics for 2007/2008 - Industry Extrapolation
(thousands of residential loans)
Summary loss mitigation statistics aggregate the Hope Now Alliance data on
a monthly basis and are extrapolated to an industry estimated aggregate.
Borrower Workout Plans (Repayment Plans
Initiated + Modifications Completed)
Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
Total 125142131167156151
Prime 47 53 50 59 59 56
Subprime 78 89 81108 96 96
Three-
Month
Rate of
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Change
Total 17315615417416718119211.8%
Prime 73 61 61 65 62 70 8013.7%
Subprime 100 94 9310910511111210.7%
Formal Repayment
Plans Initiated
Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
Total 102116105120112101
Prime 37 42 40 47 46 44
Subprime 65 74 65 73 67 57
Three-
Month
Rate of
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Change
Total 117101 94100 97105112 6.5%
Prime 57 45 45 45 45 51 5813.6%
Subprime 61 56 49 55 52 54 54 0.5%
Modifications Completed
Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
Total23 26 26 47 43 50
Prime 10 11 10 12 14 12
Subprime 13 16 16 35 30 38
Three-
Month
Rate of
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Change
Total56 55 59 74 70 76 8020.2%
Prime 16 16 16 19 17 19 2213.7%
Subprime 40 39 44 54 53 57 5822.6%
Modifications as a
Percentage of
Workout Plans
Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
Total 18.6% 18.5% 19.7% 27.9% 27.9% 33.3%
Prime20.8% 19.9% 19.3% 20.0% 22.9% 21.3%
Subprime 17.2% 17.7% 20.0% 32.2% 30.9% 40.3%
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08
Total 32.1% 35.4% 38.7% 42.5% 41.8% 42.2% 41.7%
Prime21.8% 26.8% 25.9% 29.9% 27.6% 27.6% 27.7%
Subprime 39.6% 40.9% 47.0% 50.0% 50.3% 51.3% 51.7%
BORROWER LOAN WORKOUT PLANS
2007 Q3 2007 Q4
Repayment Plans 322,909 333,393
Prime 120,254 136,364
Subprime 202,656 197,029
Modifications 75,326 140,401
Prime 29,99937,162
Subprime 45,327 103,239
Workout Plans 398,236 473,794
Prime 150,253 173,526
Subprime 247,983 300,268
2008 Q1 2008 Q2 2008 JulyTotal
Repayment Plans 312,225 301,894 111,993 1,382,414
Prime 146,586 141,12657,822 602,152
Subprime 165,639 160,76854,171 780,262
Modifications 170,090 220,10080,042 685,959
Prime 48,02255,90722,115 193,204
Subprime 122,068 164,19357,927 492,754
Workout Plans 482,315 521,994 192,034 2,068,372
Prime 194,607 197,03379,937 795,356
Subprime 287,708 324,961 112,097 1,273,016
FORECLOSURE SALES
2008
2007 Q3 2007 Q4 2008 Q1 2008 Q2 JulyTotal
Foreclosure Sales 135,330 151,403 202,970 245,688 91,752 827,142
Prime 53,760 59,750 82,819 107,661 44,090 348,079
Subprime 81,570 91,653 120,151 138,027 47,662 479,063
Workout Plans = Repayment Plans + Modifications
Repayment Plans: A plan that allows the borrower to become current and
catch up on missed payments that are appropriate to the
borrower's circumstances, which involves deferring or
rescheduling payments but the full amount of the loan is
expected ultimately to be paid and within the original
contractual maturity of the loan.
Modifications:A modification occurs any time any term of the original
loan contract is permanently altered. This can involve
a reduction in the interest rate, forgiveness of a
portion of principal or extension of the maturity date
of the loan.
SOURCE HOPE NOW
