Loan Modification Applications Dropped 14 Percent in November

Loan ModificationOnly about 34,000 troubled homeowners received permanent loan modification from financial institutions in November 2014, a decrease of 14 percent from October’s tally of about 39,000. This was revealed earlier in the week by private-sector group HOPE NOW in its monthly report of foreclosure and loan modification statistics.

Among the modifications included in HOPE NOW’s statistics, approximately 23,000 of these loans were modified through proprietary programs, while exactly 11,003 were modified courtesy of the Obama administration’s Home Affordable Modification Program. In addition, HOPE NOW reported about 136,000 non-foreclosure solutions (total loan modifications, short sales, deeds in lieu, workout plans) in November, with this metric still outnumbering completed foreclosures by approximately four to one. There were some 1.7 million potential foreclosures resolved through alternative tools, while there were only 426,000 foreclosure sales year-to-date, as per HOPE NOW’s data.

In all, the total number of non-foreclosure solutions since 2007 increased to over 23 million, while the number of permanent loan modifications is currently at about 7.3 million. 5.9 million of these modifications so far have been proprietary, while 1.4 million consumers took advantage of the HAMP initiative.

On a positive note, HOPE NOW reported about 28,000 foreclosure sales in November, marking the lowest monthly total on record since the organization began tracking this statistic in 2007. This was also 27 percent less than the approximately 39,000 foreclosures on record for the month of October. Foreclosure starts dropped 8 percent from 65,000 or so in October to approximately 60,000 in November.

However, serious delinquencies had ticked up from 1.91 million mortgage loans in October to 1.97 million loans in November, a jump of 3 percent month-over-month for loans that were overdue by more than 60 days.

“Although November tends to be a slower time of the year for foreclosure activity, HOPE NOW is still proud of the progress made by its members to offer five times as many non-foreclosure options during the month,” read a prepared statement from HOPE NOW executive director Eric Selk. “The total solutions offered by the industry since the crisis started are a reminder of the hard work of our membership.” He also stressed the importance of making use of alternative tools should a consumer not qualify for a home loan modification.

“For instance, repayment plans make more sense in cases of short-term hardship,” Selk explained, hammering home his point about alternative solutions. “As home prices appreciate, there are also solutions that help leverage this improvement. This point is illustrated very clearly by our life-to-date total solutions metric. The bottom line is that there is no single solution when reviewing at-risk homeowners and decisions are made based on sustainability.”

Going forward, HOPE NOW will be carrying out two events for troubled homeowners in 2015, one event in Oakland, and another one to be held in San Bernardino. Selk also stated that HOPE NOW has more than a few community roundtables in the works, with the goal of these activities to “engage the industry, nonprofits, and local partners in a holistic approach to finding viable housing solutions.”