Despite large numbers of successful mortgage modifications, foreclosure listings across the nation are still growing, according to the Hope Now alliance. The alliance modified and refinanced almost 250,000 mortgage loans in February. Hope Now is a coalition of HUD-approved housing counselors, mortgage lenders, housing advocates and investors who are working together to stop the growth of foreclosure listings.
Of the 250,000 loans processed by Hope Now, about 134,000 were loan modifications, which are often better than repayment plans. Modifications reduce monthly payments by reducing the principal balance, reduce the interest rate or extend the mortgage term. Repayment plans do not lessen monthly payments. They simply defer the payment of arrears to the last paying periods of the loan.
Faith Schwartz, executive director of the Hope Now alliance, said the mortgage industry has been working with borrowers so that they can keep up with their payments and save their homes from foreclosures.
Still, foreclosure listings are growing. The number of foreclosure filings increased from 217,000 units in January to 243,000 units in February, the second consecutive month that foreclosures increased since the declines in the last months of 2008. In February, banks repossessed about 87,000 units, an increase of 28 percent compared to the 68,000 units added to foreclosure listings the previous month. Since the housing crisis began in the middle of 2007, nearly 1.4 million homes have been added to foreclosure listings.
Foreclosures seemed to be slowing down in the last months of 2008, with only 77,000 foreclosures in October, 69,000 foreclosures in November and only 56,000 units added to foreclosure listings in December, based on data from Hope Now. But foreclosure moratoriums launched by the federal government and efforts by state governments to reduce state foreclosures could have temporarily reduced numbers of units in foreclosure listings.
Nevertheless, Schwartz is still hopeful. She said mortgage lenders are becoming more open and flexible to modification efforts due to the deteriorating employment situation. About 650,000 jobs are being eliminated every week due to the downturn.
In addition, the effects of Obama’s foreclosure prevention program might not be visible until after three months, which is the average length of time a loan modification is completed. Most lenders are still finalizing their modification processes and training their staff so that all are ready and clear when they begin accepting and processing modification applications.
Author Resource:-
John Cutts has been educated in the finer points of the foreclosures market over 5 years. Read foreclosure news at EForeclosureMagazine.com.
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