Proprietary Loan Mods Continue to Be More Efficient


January data confirm once again that proprietary mortgage loan modifications continue to be more affordable than Home Affordable Modification Program options.

Collectively, the voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and nonprofit counselors, Hope Now provided permanent mortgage loan modifications to roughly 78,400 homeowners in January.

And up to 63,539 of those homeowners received proprietary loan modifications, compared to 14,858 who received HAMP modifications.

The so-called proprietary modifications completed through individual lender programs once again in January were more affordable for borrowers and accounted for a higher percentage of modifications.

The 55,698 proprietary loan modifications that included fixed interest rates of five years or more accounted for 88% of the total.

Up to 54,113 proprietary loan modifications with reduced principal and interest monthly payments accounted for 85% of the total, of which modifications with reduced principal and interest payments of more than 10% accounted for 76% of the total.

Alongside modifications servicers are closing more short sales bringing the total to 1,182,283 since December 2009, including 29,244 short sales completed in January.

To date, nonforeclosure solutions—or the combined total of loan modifications and short sales—is approximately 6.18 million.

These data indicate industry efforts to fine-tune its borrower outreach strategies and “target markets and population segments that benefit the most from the wide range of mortgage services offered,” have been successful, said Hope Now executive director, Eric Selk, adding, however, Hope Now members will continue to find better ways to help distressed homeowners.

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