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Declining Non-Foreclosure Solutions Indicate Healthier Housing Market

avoid-foreclosureServicers industry-wide completed fewer non-foreclosure solutions for borrowers in 2015 than in 2014, which indicates that the housing market continues to get healthier more than seven years after the crisis first hit, according to data released on Friday by HOPE NOW [1], a voluntary private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors.

The HOPE NOW data shows that 1.45 million homeowners received a foreclosure alternative solution during 2015, including loan modifications, short sales, deeds in lieu of foreclosure, or other workout plans. Approximately 419,000 of those 1.45 million non-foreclosure solutions were permanent loan modifications, which is down 14 percent from 2014’s loan modification total of 489,000. Of those 419,000 completed last year, 302,000 of them were done through proprietary programs and 117,000 were completed through the government’s Home Affordable Modification Program (HAMP).

The decline in non-foreclosure solutions is concurrent with a similar decline in foreclosure-related metrics. HOPE NOW reported significant declines in foreclosure starts, foreclosure completions, and serious delinquencies in 2015 compared with 2014. Foreclosure starts dropped down to 705,000 in 2015, a decline of 16 percent from the previous year’s total of 842,000. Completed foreclosure sales fell off by 25 percent in 2015—from 455,000 down to 342,000.

Serious delinquencies (60+ days or more overdue or in foreclosure) continued their three-year trend of decline, falling by 16 percent from the end of 2014 to the end of 2015 (from 1.9 million down to 1.6 million).

“The 2015 data report affirms the recent trends in housing market recovery.”

Eric Selk, Executive Director, HOPE NOW

“The 2015 data report affirms the recent trends in housing market recovery,” HOPE NOW Executive Director Eric Selk said. “Delinquency and foreclosure data continues to decrease and approach pre-crisis norms. Although permanent loan modifications were at a peak of 160,000 in June 2010, they remain around 30,000 a month and nearly 420,000 homeowners received a modification in 2015. The industry continues to provide homeowners with an array of solutions before a foreclosure is completed. This is reflected in the data as foreclosure starts and sales declined 16 percent and 25 percent, respectively, from 2014 to 2015. Just six years ago, we were at the apex of the foreclosure crisis with over 4.1 million homeowners in serious delinquency and today, we are at 1.6 million. This is a true testament to the recovery and all the hard work that HOPE NOW members have maintained to assist those in need.

The non-foreclosure solutions completed in 2015 bring the total completed by the industry since 2007, when HOPE NOW began tracking the data, up to approximately 24.7 million, about 7.75 million of which are permanent loan mods (6.2 million proprietary, 1.56 million through HAMP).