Approximately 421,000 homeowners used various non-foreclosure solutions from mortgage servicers in the second quarter of 2014, according to recently released Q2 2014 data from HOPE NOW, a private sector alliance between various players in the mortgage industry.
The number of non-foreclosure solutions in Q2 was almost quadruple the number of foreclosure sales for the same period (115,000), according to HOPE NOW. Foreclosures experienced a quarter-over-quarter decrease of 9 percent (down from 126,000 in Q1). The foreclosure total for Q2 was the lowest for any quarter since HOPE NOW began reporting foreclosure data in 2007.
The most popular non-foreclosure solution for Q2 was permanent loan modification, which approximately 116,000 homeowners utilized. Out of those, about 82,000 were proprietary loan modifications and about 34,000 were loan modifications processed through the Home Affordable Modification Program (HAMP).
Other popular non-foreclosure solutions in Q2 were short sales, with numbers totaling close to 33,000, and deeds in lieu with a total of 7,561, according to HOPE NOW. Other non-foreclosure solutions such as repayment, retention, and liquidation plans made up the total of 421,000.
HOPE NOW data shows the number of loan modifications declined quarter-over-quarter, however. The 116,000 loan modifications for Q2 represents a 13 percent decrease over Q1 (133,000). Short sales also ticked downward from Q1, falling 3 percent from 34,000 to 33,000. Deeds in lieu crept upward from 7,409 to 7,561, a slight increase of 2 percent quarter-over-quarter.
"Since 2007, our members have offered over 20 million mortgage solutions, including more than seven million permanent loan modifications," HOPE NOW executive director Eric Selk said. "HOPE NOW continues to engage all stakeholders on a daily basis and our data reflects these efforts. For the balance of the year, we will remain focused on educating at-risk borrowers, assisting them with sustainable mortgage options and working with our members to improve communication and institute best practices. Additionally, HOPE NOW members will continue to work with leaders and government agencies on a local level so that special attention can be given to the various markets around the country that still have the biggest housing related issues."
Loan modification has been steadily declining for the last year according to HOPE NOW data, however. The Q2 total of 116,000 represents a huge drop of 43 percent from Q2 2013, when there were 204,000 loan modifications. There was also a large drop in year-over-year in the number of foreclosure starts from Q2 2013 to Q2 2014, going from 323,000 to 200,000, a change of 38 percent. Foreclosure sales declined 27 percent year-over-year from 158,000 to 115,000.
HOPE NOW reports that since 2007, approximately 7.1 million permanent loan modifications have been completed in the U.S. Close to 5.7 million of those were proprietary loan modifications and nearly 1.4 million were done through HAMP.