The latest Mortgage Bankers Association (MBA) mortgage report shows a rise in 30-day delinquencies, including an increase in late payments on prime, fixed-rate mortgages. Overall, the picture hasn't changed significantly from first quarter, as one in 11 mortgage holders remains at serious risk of foreclosure (60 days delinquent or more).
Serious delinquencies and foreclosure starts continued to show declines, as many loan servicers slow down evictions while correcting problems related to robo-signing and other illegal practices. Even so, more than 5.5 million U.S. homeowners are at some stage of delinquency or in the foreclosure process.
While foreclosures continue to be stuck in high gear, foreclosure prevention is dragging. According to HOPE NOW's June 2011 Loan Modification Industry Report, in the second quarter nearly 72,000 fewer homeowners received loan modifications (including trial and "proprietary" modifications outside the federal HAMP program) compared to the first quarter of this year. If this slow pace continues, the number of modifications made this year will be significantly lower than in 2010.
Taken together, the MBA and HOPE NOW reports show we are nowhere near bringing foreclosures under control. We need stronger options for preventing unnecessary foreclosures, and basic, fair ground rules in place to ensure that every troubled loan gets a real review. The alternative is more of the same: unnecessary losses that batter the entire economy.
For more information on policy solutions, see CRL testimony before the House Financial Services Subcommittee on July 7, 2011.
For more information: Mary Moore at (919) 313-8532 or firstname.lastname@example.org.