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Non-Foreclosure Solutions Still Total Nearly Half a Million in Q3 Despite Yearly Dropoff

mod-app-approved [1]The number of U.S. homeowners who received non-foreclosure solutions in the third quarter of 2014 totaled approximately 468,000 despite seeing large year-over-year declines in every category of non-foreclosure solutions, according to data released this week by the HOPE NOW Alliance [2].

Overall, foreclosure completions saw a significant decline in the third quarter. About 108,000 foreclosure sales were completed during Q3, which is the lowest total for any quarter since HOPE NOW began tracking the data in 2007. The number of foreclosure sales in Q3 represented a decline of 6 percent (115,000) from the previous quarter and 36 percent (166,000) from the same period in 2013.

Non-foreclosure solutions, which include permanent loan modifications, short sales, repayment plans, deeds-in-lieu of foreclosure, and other retention plans, declined by 19 percent from Q3 2013 to Q3 2014 (579,000 compared to 468,000), according to HOPE NOW. Despite the decline, non-foreclosure solutions still totaled more than four times that of foreclosure completions (108,000) in Q3, just as they did in the second quarter [3]. Also despite the large year-over-year drop, the number of non-foreclosure solutions increased by 11 percent from the second quarter of 2014 to the third quarter (421,000 up to 468,000).

Foreclosure starts plummeted by 27 percent year-over-year in the third quarter, down to 212,000 from 290,000, according to HOPE NOW. Quarter-over-quarter, however, foreclosure starts jumped 6 percent from Q2 to Q3 (200,000 up to 212,000)

About 109,000 homeowners received loan modifications in the third quarter, a decline of about 6 percent from the previous quarter and 40 percent from the same period a year ago. About 79,000 of the homeowners who received loan mods in Q3 obtained proprietary loan mods and slightly more than 29,000 of them received loan mods under the government's Home Affordable Modification Program (HAMP [4]), according to HOPE NOW.

Short sales, which are sales of the properties for less than the balance of debts secured by liens against the properties, totaled 30,000 in Q3, a decline of 9 percent (33,000) from the previous quarter and 56 percent from Q3 2013 (68,000), according to HOPE NOW. The number of deeds-in-lieu of foreclosure was reported at 7,000 for Q3, which was a drop of about 7 percent from Q2 (7,500) and 4 percent from Q3 2013 (7,300).

Mortgage loans that were 60 or more days delinquent declined 10 percent year-over-year in Q3, from 2.11 million down to 1.89 million, according to HOPE NOW.

"While the third quarter did show declines across the board in mortgage solutions, it is important to note that foreclosure sales and serious delinquencies have declined accordingly," said Eric Selk, executive director of HOPE NOW. "The delinquency trends, quarter over quarter, show a steady improvement in the national market and point towards housing stabilization."

As part of an ongoing community stabilization effort that includes providing assistance to homeowners struggling with their mortgage loans, HOPE NOW has scheduled an outreach meeting for December 6 in the Tacoma, Washington, area that will be attended by Congressman Denny Heck. A large number of military homeowners are expected to attend due to the close proximity (about 15 miles) of Tacoma to Joint Base Lewis-McChord.

"As we head into 2015, we will be targeting markets for outreach based on the delinquent portfolios of our members," Selk said. "The need for partnership between our members and local non-profits, community leaders and others is paramount to our efforts in reaching at-risk families. We will also continue to make outreach to service members a high priority."