Loan Mods, Short Sales Outpace Foreclosure Sales 2-to-1 in Q1
By: Esther Cho
Loan modifications and short sales managed to outpace foreclosure sales at a ratio of 2-to-1 in the first quarter of 2013, HOPE NOW data revealed.
From January through March, servicers implemented 202,776 proprietary loan modifications and 42,157 modifications under the Home Affordable Modification Program, bringing the first quarter total to 244,933, according to HOPENOW, a private sector alliance of mortgage servicers, investors, mortgage insurers, and nonprofit counselors. The first quarter figure represents a 4 percent decrease from the previous quarter.
Since 2007, servicers have provided more than 6.32 million loan modifications for homeowners.
Of that total, a significant share—5.14 million—were private sector loan modifications, while 1.18 million were through HAMP.
At the same time, 83,394 borrowers avoided foreclosure through the short sale process, down 21 percent from the fourth quarter of 2012. Since 2009, the industry has completed 1.23 million short sales.
For the first quarter, the combined total for loan modifications and short sales reached 328,327. Meanwhile, first quarter HOPENOW data showed foreclosure sales fell 14 percent to 161,641.
Eric Selk, executive director of HOPENOW, described the 2-to-1 margin for short sales/loan modifications to foreclosure sales as “continued proof that the efforts of the industry, the government, the non-profit community and others still has a significant, positive impact on the housing market and the overall economy.”
Although foreclosure sales were down, foreclosure starts increased 30 percent in the first quarter to about 472,000. Interestingly, from February to March, foreclosure starts moved in the opposite direction and declined 40 percent to 115,582 compared to 191,589 the month before.
Foreclosure sales also did not reflect the quarterly trend and increased 8 percent to 52,000 in March compared to 48,000 in February.
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