Mortgage modifications drop 42% in first half: Hope Now
The mortgage industry completed 558,000 mortgage modifications in the first six months of 2011, down 42% from the same period one year ago, according to the Hope Now alliance of servicers, investors and counselors. Nearly two-thirds of the workouts came through private programs, totaling 375,000 compared to the roughly 183,000 under the Home Affordable Modification Program. Private mods dropped 41% from last year, while HAMP modifications fell 45%. However, the amount of delinquent homeowners showed a decline. There were 2.7 million homeowners in 60-day delinquency or worse in the first half of 2011, down 27% from the same period last year, according to Hope Now. Foreclosure sales dropped 25% to roughly 432,000 in 2011, and foreclosure starts decreased 9% to 1.13 million. With sales and starts combined, the amount of foreclosures is 1.5 million, nearly three times more than the 558,000 modifications completed in the first half of the year. Much of the slowdown in foreclosures stems from self-imposed delays due to documentation problems. In its second-quarter financial filing, Freddie Mac pointed out it took an average of 500 days to complete a foreclosure, up from 451 days last year. This, Freddie said, was hampering mortgage holders' ability to shed these assets in a timely manner. Faith Schwartz, the Hope Now executive director said the decrease shows more homeowners are receiving assistance. "There were 1 million less delinquent homeowners in the first half of 2011 than there were for the same time period last year," Schwartz said. "The decrease in delinquencies combined with the drop in foreclosure starts and sales shows that more homeowners are getting assistance through the many options available to them." Write to Jon Prior. Follow him on Twitter @JonAPrior.