Tuesday, March 31, 2009

Hope Now Numbers

We have made fun of Hope Now in the past. However they do appear to be chugging along and making some progress for mortgage modifications. We know there is incentives all over for lenders to reduce foreclosures, any any little bit that actually stabilizes the markets is good. However, prolonging the inevitable is not so good.

So lets get to the numbers put out by Hope Now on the work they are doing. This article titled Foreclosures increase despite lender aid from the Business Journal sounds like a press release, but lets take a look anyways -

In February, nearly 250,000 homeowners received either mortgage modifications or repayment plans from their lenders, according to Hope Now, a coalition of lenders, investors and community advocacy groups put together to combat the foreclosure plague.

About 134,000 of those workouts were mortgage modifications, which typically involve lowering the loan interest rates, lengthening the mortgage terms or reducing the principal owed to make loans more affordable. Modifications are considered more comprehensive and effective than repayment plans, which simply tack the late payments on to the end of the loan and don’t reduce payments.

Despite that aid, the number of foreclosures started rose from 217,000 in January to 243,000 in February, according to Hope Now. Banks repossessed about 87,000 homes during February, a 28 percent jump from 68,000 in January. Since the mortgage meltdown began in July 2007, nearly 1.4 million homes have been lost.

The modifications must be sustainable, and with the increases in unemployment levels they do not seem as likely to stay. With lenders going back to stricter lending practices and more people underwater, therefore unable to get mortgages, it will be quite a while for the housing bust to hit bottom.

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