Loan modifications boost the housing recovery

Total loan modifications reach 6.6 million

An estimated 63,000 homeowners received permanent, affordable loan modifications from mortgage servicers in July, including mods completed under both proprietary programs and the government’s Home Affordable Modification Program, according to a report from Hope Now.

The July numbers indicate that an estimated 50,000 homeowners received proprietary loan modifications, with 13,183 homeowners receiving HAMP modifications, according to data from the U.S. Department of Treasury.

For the year, the total number of loan mods currently stands at approximately 519,000, compared to an estimated 378,000 foreclosure sales reported for the year so far.

July’s total of 63,000 modifications makes the total number of permanent loan modifications 6.6 million since 2007. In the same time period, approximately 5.36 million homeowners have received proprietary loans modifications.

Since HAMP reporting began in 2009, more than 1.2 million homeowners have received modifications through the program.

The Hope Now report revealed a large annual decrease in foreclosure sales, which fell from 485,000 in the first seven months of 2012 to 378,000 during the same period this year.

However, foreclosure sales in the month of July 2013 increased, with approximately 59,000 foreclosure sales completed. This is up 14% from June, when 52,000 sales were completed. Foreclosure starts rose slightly as well, with approximately 102,000 recorded in July compared to 98,000 in June — an increase of about 5%.

On a monthly basis, short sales remained unchanged at 26,000.

Since the beginning of the Hope Now initiative in 2009, an estimated 1.32 million short sales have been completed.

The number of loans considered 60-plus days delinquent hit 2.24 million in July, compared to 2.21 million in June, up 1%, according to data from the Mortgage Bankers Association.

Hope Now Executive Director Eric Selk seems positive about what lies ahead for the market.

“Our July data shows a consistent trend, month-over-month, pointing toward market stabilization. Loan modifications and short sales continue to outpace foreclosure sales,” said Selk. “Through the first seven months of the year, there have been approximately 80,000 less foreclosure sales compared to the same time period in 2012.”

Keefe, Bruyette & Woods recently stated that loan modifications are among a number of factors that are causing delinquencies to decline, which in turn is strengthening the housing market as a whole.

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