Hope Now Says More Defaults but Less Foreclosure Listings
May 4th, 2009 by 
Joseph Smith
Last month, the number of houses that received default notices increased but the number of houses added to foreclosure listings decreased, according to Hope Now.
Hope Now said that 290,000 homeowners received notices of default in March, an increase of almost 20 percent from the 243,000 default notices sent by mortgage lenders in February and the biggest monthly total since 2007 when it started monitoring foreclosures.
But despite the increase in default notices, the number of houses added by lenders to their foreclosure listings decreased to only 53,000 units, well below the 87,000 foreclosure properties in February.
According to Hope Now, there have been 1,447,866 houses added to foreclosure listings since the housing crisis began in July 2007.
Hope Now is an alliance of HUD-certified counselors, mortgage lenders, investors and housing nonprofits that provide foreclosure and debt management counseling for free.
The alliance has already helped modify about 134,000 mortgage loans, a jump of almost 20,000 from the average number of loans modified since September last year. Another 115,000 borrowers were given repayment plans, putting the total number of homes saved from foreclosure listings to almost 250,000 units in March.
Loan modifications involve reduction or suspension of rates, extension of loan terms, reduction of loan balances while repayment plans just reschedule payments without restructuring the loans. Loan modifications are more effective because they reduce the monthly payments and make them affordable for borrowers.
Faith Schwartz, head of Hope Now, said that mortgage lenders have been looking for more solutions to help homeowners save their houses from foreclosure listings. She said the provisions of President Obama’s Homeowner Affordability and Stability Plan will lead to more loan modifications.
The sharp decline in number of houses added to foreclosure listings is attributed by Hope Now statistician Michael Bright to lenders and servicers’ decision to suspend foreclosures as they prepare to modify or refinance loans under the Obama administration’s foreclosure prevention program.
Notwithstanding lenders efforts, Mark Seifert, head of Cleveland’s East Side Organizing Project, complained that lenders have not been responding to requests from the group’s counselors for several weeks now.
Lenders explain that they are still putting their systems in place to incorporate Obama’s Making Home Affordable schemes. They said they have given some grace periods to homeowners while they are preparing their tools for modifications.
Schwartz said she hopes more homeowners will be helped by Hope Now after 11 major mortgage services committed to support Obama’s program to cut down the number of houses being added to foreclosure listings.
