239,000 Foreclosures Prevented in December
Hope Now, the private sector alliance of mortgage servicers, counselors, and investors that works to prevent foreclosures and keep homeowners in their homes, announced Thursday that its members and the larger mortgage lending industry completed a record-high 239,000 foreclosure prevention workouts in December 2008. This marks the first time since Hope Now began to compile data in July 2007 that the number of workouts exceeded 200,000 in 4 consecutive months. “Hope Now members know they have to keep doing more to keep up with the growing needs of homeowners at risk of losing their homes,” said Faith Schwartz, Hope Now’s executive director. “The December results demonstrate that Hope Now members are moving aggressively to do what’s needed to avoid preventable foreclosures.” December's results show the mortgage lending industry is shifting its focus to loan modifications. 85 percent of homeowners with subprime loans who received workouts in December received modifications, while 37 percent of prime borrowers who received workouts completed a modification. For the first time since July 2007, the number of loan modifications was more than half of all workouts completed in a single month. The 122,000 modifications completed in December 2008 are 19 percent higher than the previous record set in October 2008. Hope Now said it expects the increasing reliance on loan modifications rather than payment plans will continue as economic conditions warrant. Despite the 34,000 month-over-month rise in foreclosure starts for December -- 75 percent of which were in prime loans -- December's results are a ray of good news for homeowners said Steve Bartlett, president and CEO of the Financial Services Roundtable, a Hope Now funding member. “When coupled with the report from the National Association of Realtors earlier this week that existing home sales in December were higher than expected, Hope Now's record-high number of foreclosure prevention workouts should provide some optimism for homeowners about the future,” he said. Including the December results, almost 2.3 million foreclosure prevention workouts were completed by the mortgage lending industry in 2008. Almost 3.2 million were completed between July 2007 and December 31, 2008. Interestingly, for the seventh consecutive month, the number of foreclosure starts for prime loans well exceeded those for subprime. Write to Kelly Curran at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.