The industry has completed about 975,000 permanent loan modifications so far in 2010, according to estimates released this week by the ""HOPE NOW Alliance"":http://www.hopenow.com.
[IMAGE] Of those, just over 331,000 have been processed under the umbrella of the federal government's Home Affordable Modification Program (HAMP), while nearly 644,000 have been restructured using servicers' own proprietary mod programs.
HOPE NOW explained that proprietary modifications follow HAMP mods in the sequence of foreclosure prevention options. When a homeowner does not qualify for the federal program, mortgage servicers determine their eligibility for a proprietary loan modification that may help them keep the home.
The latest ""data from the Treasury"":http://www.financialstability.gov/docs/June%20MHA%20Public%20Revised%20080610.pdf provides details on what happens to borrowers that are not accepted into HAMP.[COLUMN_BREAK]
Based on information from the eight largest HAMP participants, 45 percent of those that don't make it into a preliminary HAMP trial receive an alternative modification from the servicer; 2.4 percent lose their home through a pre-foreclosure short sale; just over 10 percent are pushed through to foreclosure; and nearly 3 percent file for bankruptcy.
An article in ""Wednesday's _Wall Street Journal_"":http://online.wsj.com/article/SB10001424052748704720004575377022447064474.html discusses how some distressed borrowers are finding help through unorthodox channels Ã¢â‚¬" such as so-called Ã¢â‚¬Ëœvulture' investment funds Ã¢â‚¬" when they aren't able to secure a modification through their original servicer.
""The Five Star Institute's"":http://www.fivestarinstitute.com CEO Ed Delgado offered an explanation to the WSJ's James Hagerty as to why some borrowers are receiving the assistance they need to avoid foreclosure and others are getting lost in the pipeline.
""There are obvious inconsistencies in treatment [of borrowers] depending on who owns and services the loan,"" Delgado told Hagerty. To some extent, he says, ""it's the luck of the draw.""
According to HOPE NOWÃ¢â‚¬â„¢s report, servicers have initiated more than 1.2 million foreclosures so far this year, and completed foreclosure sales on 583,000 homes.
The AllianceÃ¢â‚¬â„¢s data, though, shows that servicers slowed the pace of foreclosures in June. Foreclosure starts dropped 7 percent compared to the previous month, and foreclosure sales were down 9 percent.