New HOPE NOW Data Shows Increase in Workouts

MBA (6/2/2008 ) Stokes, Aleis
Latest data from the HOPE NOW Alliance, of which the Mortgage Bankers Association is a founding member, show that an increasing number of consumers have reached out to lenders for assistance, as well as an increase in the number of lender-initiated workout plans.

HOPE NOW, the private sector alliance of mortgage servicers, counselors and investors working to help prevent foreclosures, announced that mortgage servicers provided loan workouts to 183,000 homeowners in April, the highest monthly amount since July 2007. The industry has helped nearly 1.6 million homeowners avoid foreclosure through workouts, including loan modifications and repayment plans.
“These numbers clearly demonstrate that HOPE NOW is succeeding at helping homeowners avoid foreclosure and stay in their homes,” said HOPE NOW Executive Director Faith Schwartz. “Foreclosure benefits no one: the borrower, community, lender and investor all lose. HOPE NOW has every incentive to help troubled homeowners hold on to their homes and the alliance will continue to do everything possible to reach and help as many as possible.”

The April report from HOPE NOW estimates that on an industry-wide basis:

• Mortgage servicers provided loan workouts for 183,000 at-risk borrowers in April. This is an increase of 23,000 from the number of workouts in March and is the largest number of workouts completed in any month since HOPE NOW’s inception.

• The total number of loan workouts provided by mortgage servicers since July 2007 has risen to nearly 1.6 million.

• Nearly 106,000 of prime and subprime loan workouts conducted by mortgage servicers in April were repayment plans while 77,000 were loan modifications.

A summary table with April results can be found at
http://www.hopenow.com/upload/misc/files/AprSummaryTable.pdf.

HOPE NOW also announced that a separate survey of subprime adjustable-rate mortgages determined that:

• Nearly 603,000 subprime loans were scheduled to reset between January and April.

• Of those subprime loans, 30,545 (5.0 percent) have already been modified. Nearly 63 percent of these modifications are for five years or longer.

• Of subprime adjustable-rate loans scheduled to reset, 273,000 (45 percent) were paid in full when the homeowner refinanced the loan or sold the property.

• A limited amount—927 (0.3 percent)—of the loans scheduled to reset have started the foreclosure process.

HOPE NOW is an alliance of counselors, mortgage market participants and mortgage servicers to create a unified, coordinated plan to reach and help as many homeowners as possible. For more information on HOPE NOW and to see the full membership of the Alliance, please visit www.HOPENOW.com.

The Homeownership Preservation Foundation’s HOPE Hotline (888-995-HOPE), available 24 hours a day, seven days a week, receives on average more than 4,000 calls per day. This is far in excess of what the mortgage lending industry has ever had to field. There is no cost to borrowers for using HOPE NOW and the 1-888-995-HOPE Hotline.

In addition to the HOPE Hotline, HOPE NOW is coordinating a nationwide campaign to reach at-risk borrowers. So far, HOPE NOW has sent 1.2 million letters. Nearly 20 percent of homeowners receiving the HOPE NOW-coordinated letters have contacted their servicer, 10 times more than the routine 2-3 percent response rate that servicers receive when they send their own mailings.

In the past three months, HOPE NOW has connected 4,000 homeowners with their lender and/or a HUD-certified housing counselor at workshops in 11 different cities in California, Georgia, Illinois, Pennsylvania, Ohio, Massachusetts, Minnesota, Wisconsin and Indiana. HOPE NOW is continually looking for additional locations to host these workshops so that more troubled borrowers can be helped.