WASHINGTON, DC -- Number of homeowners helped in July 2008 sets another monthly record 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 126 152 134 143 169 169
Prime 51 61 55 63 65 76
Subprime 75 91 79 81 103 92
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08
Total 168 179 179 195 192 187 197
Prime 78 82 90 95 96 96 105
Subprime 90 97 89 100 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%
Subprime 43.1% 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%
Subprime 49.4% 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 125 142 131 167 156 151
Prime 47 53 50 59 59 56
Subprime 78 89 81 108 96 96
Three-
Month
Rate of
Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Change
Total 173 156 154 174 167 181 192 11.8%
Prime 73 61 61 65 62 70 80 13.7%
Subprime 100 94 93 109 105 111 112 10.7%
Formal Repayment
Plans Initiated
Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
Total 102 116 105 120 112 101
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 117 101 94 100 97 105 112 6.5%
Prime 57 45 45 45 45 51 58 13.6%
Subprime 61 56 49 55 52 54 54 0.5%
Modifications Completed
Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
Total 23 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
Total 56 55 59 74 70 76 80 20.2%
Prime 16 16 16 19 17 19 22 13.7%
Subprime 40 39 44 54 53 57 58 22.6%
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%
Prime 20.8% 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%
Prime 21.8% 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 29,999 37,162
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 July Total
Repayment Plans 312,225 301,894 111,993 1,382,414
Prime 146,586 141,126 57,822 602,152
Subprime 165,639 160,768 54,171 780,262
Modifications 170,090 220,100 80,042 685,959
Prime 48,022 55,907 22,115 193,204
Subprime 122,068 164,193 57,927 492,754
Workout Plans 482,315 521,994 192,034 2,068,372
Prime 194,607 197,033 79,937 795,356
Subprime 287,708 324,961 112,097 1,273,016
foreclosure sales
2008
2007 Q3 2007 Q4 2008 Q1 2008 Q2 July Total
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.
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Source: HOPE NOW
CONTACT: Kara Ross, +1-202-683-3117, Kate McGann, +1-202-683-3143, or
Aleis Stokes, +1-202-557-2741, all for HOPE NOW
Web site: http://www.hopenow.com/
About This Release
If you have any questions regarding information in this press release, please contact the organization listed in the press release. Issuers of press releases and not TCI are solely responsible for the accuracy of the content.
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