Non-Foreclosure Solutions Down Year-Over-Year, But Still Outpace Completions Four to One

While both non-foreclosure mortgage solutions and completed foreclosures were down over the year in July, the ratio remained virtually the same—more than four solutions for every foreclosure sale, according to data for July 2015 released by non-profit alliance HOPE NOW.

The mortgage industry reported about 122,000 non-foreclosure solutions (including short sales, deeds-in-lieu of foreclosure, and other workout plans) for July, while about 29,000 foreclosures were completed. These numbers compare with 157,000 and 39,500, respectively, for July 2014, according to HOPE NOW.

"At the end of June, the mortgage industry hit significant milestones for loan solutions and proprietary loan mods—24 million and six million respectively," said Eric Selk, Executive Director of HOPE NOW. "Based on July’s data, it is clear that servicers continue to work with customers to offer the best options —whether they are permanent, short term or liquidation. In fact, looking at the year over year comparison, it is notable that the decline in foreclosure sales is more than double the decline in permanent loan mods."

Out of those 157,000 non-foreclosure solutions completed in July, about 33,000 of them were permanent loan modifications. Approximately 23,000 of the permanent loan mods were proprietary mods, while nearly 10,000 of them were completed through the government's Home Affordable Modification Program (HAMP). About 66 percent of the 23,000 proprietary modifications completed in July (15,450) reduced the borrower's monthly mortgage payment by more than 10 percent, according to HOPE NOW.

"Additionally, it’s important to note that decisions are often driven by the customers’ requests," Selk said. "For example, if a customer wants to keep their home, there are many options beyond a traditional HAMP modification. HOPE NOW continues to work with our industry members, as well as our nonprofit and government partners, to insure that at-risk homeowners are properly educated on all options available to them as well as their specific next steps towards resolution. We have met with dozens of stakeholders at the local level who are interested, not only in loss mitigation solutions for their communities, but also in educating potential new home buyers on budgeting, saving, and credit to prepare for responsible home ownership."

The total number of non-foreclosure solutions reported by the industry since 2007, when HOPE NOW began tracking the data, is more than 24 million; more than 7.5 million of those have been permanent loan modifications.

Click here to see the complete dataset from HOPE NOW.

Click here to see highlights from the July 2015 report from HOPE NOW.

HOPE NOW is working with local housing counseling groups in the Los Angeles area to host a series of outreach events designed to educate residents on down payment assistance options available to low- and moderate-income families. HOPE NOW has scheduled events for September 26 in Inglewood and November 14 in Monterey Park. Loss mitigation events are scheduled for Los Angeles on October 22, Fort Lauderdale, Florida, on November 19, and Queens, New York, on December 9.