HOPE NOW Continues to Fudge Loan Modification Numbers
Posted on March 4th, 2009
HOPE NOW reported loan modification numbers just recently, and there’s been an interesting change. What’s been nice in the past is they’ve been relatively consistent in the numbers that they report, as well as how they report them. Previously, it’s been fairly easy to see if loan modification numbers were increasing, decreasing, or treading water.
Now, both Housing Wire and DS News are reporting like this:
“The ratio of repayment plans to modifications for prime borrowers during January was 2.23 percent — up from 1.95 percent in December — while for subprime borrowers that ratio was 0.53 percent — unchanged from December’s data.”
Do you know what that means? I thought it was the purview of the federal government to obfuscate the numbers, so they didn’t have to tell the truth. After all, they’re pretty good at under-reporting unemployment, and they’ve eliminated reporting on a key inflationary indicator for the money supply.
When you report numbers in this manner, it makes it just a little more challenging to track what’s being done, and it’s easier to make your organization look good… deservedly, or not.
Other interesting tidbits…
Slightly more than 17 percent of all modifications are being made to mortgages owned by Fannie Mae and Freddie Mac.
According to James Lockhart of the newly-found FHFA, “Fannie Mae and Freddie Mac own or guarantee almost 31 million mortgages, about 58% of all single family mortgages.”
So if Fannie and Freddie accound for 58% of all mortgages, and prime delinquencies have been exceeding sub-prime since last summer, then you’re getting SCREWED if you had good credit when you got your loan. Fannie and Freddie should be accounting for at least half of all loan modifications, based on their market share, yet they’re only accounting for 17 percent?
Mr. Lockhart claims that Fannie/Freddie loans account for only 20% of all seriously delinquent mortgages. My personal experience differs. I’m seeing a substantially higher percentage of borrowers who are trying to prevent foreclosure on agency loans.
Furthermore, if you dug a little deeper, you’d find that the difference between the previous mortgage payment and the modified mortgage payment would be much smaller for the GSE loans.
According to DS News, “about three percent of all modifications are being made to mortgages owned by Ginne Mae.”
Back in olden times (the late 90’s), FHA loans accounted for about 6% of the market share. Their market share has been on the rise in the last few years, so it looks to me like they could be doing a little bit more, as well. The Wiki on GNMA says that the 2003 statement claims that they insure 30 million loans.
Either one of two things is happening: either NOBODY calls HOPE NOW if they have a government-backed loan, or the government is not walking its talk when it comes to loan modification. Call me cynical, I think it’s the latter.
Whatever their numbers, our averages are TROUNCING the results you would get by going directly to your lender, by filing bankruptcy, or using “Hope” Now. If you need help, go here: http://foreclosureresolutioncenter.com.
Filed under FHFA, FNMA, Freddie Mac, GNMA, Ginnie Mae, HOPE NOW, Loan Modification, Prevent Foreclosure, fannie mae, fha | No Comments »
HOPE NOW Reports Loan Modification Numbers
Posted on January 31st, 2009
“HOPE NOW is a waste of time!” she exclaimed. Now granted, I don’t get calls from any of HOPE NOW’s satisfied “customers.” She goes on to tell me the usual story about HOPE NOW, and how they did very little to help her solve her problems. “All they did was take down my monthly budget numbers and pass them on to the lender. I never heard from them again.”
The homeowners who call me typically have real problems, a legitimate hardship and are dealing with issues that require a little more attention than simply logging financials and passing them on to the lenders. When homeowners like this contact HOPE NOW, they’re often more than a little “peeved” at the results they get from that organization.
HOPE NOW published its December numbers and announced that for the first time since July of 2007, loan modifications accounted for more than half of all workouts. In an age when getting a loan modification is easier than at any time in human history, they’re beating their chest about beating coin-flip odds.
The other interesting piece of information:
ONLY 37 percent of prime borrowers who received workouts
completed a loan modification.
I’d bet that their recidivism rate is also higher than the industry average.
I’m certain that this number has a lot to do with the fact that the GSE, FHA and VA loans are less inclined to offer loan modifications than sub-prime.
Despite this resistance, a 37% loan modification rate is absolutely deplorable. I suggest that the main reason that the loan modification rate is so low is because they’re working for the lenders, not the borrowers.
Based on my interactions with people associated with HOPE NOW, and the experience I have in dealing with homeowners who were not helped by the organization, here are my observations:
1- HOPE NOW is basically running a mail-forwarding service. If you’d prefer to call them, they’ll forward your info to your lender if you’d like. That’s about it, though.
2- While they may call their telephone operators “counselors,” don’t expect any counseling. I suppose it depends on how you define the word “counseling.” If you mean, “administer advice to assist you in reaching your best outcomes,” you’re barking up the wrong tree [See point #3].
3- Because they’re originated and funded by the mortgage industry, they’re working on behalf of the lenders. Therefore, they offer little of value beyond what you could get by contacting your lender directly.
4- They’re best at solving “small” problems. If you’ve had a slight mishap but your financial situation is back to normal, it may be easier to work through them than directly through your lender.
5- Once they’ve submitted your information, don’t expect them to do any follow-up afterwards.
6- Once they’ve submitted your information, you’ll most likely go back to dealing directly with your lender.
7- If you’re looking for someone to act on YOUR behalf, to help you obtain the best terms possible, or to help you deal with financial difficulties, you’d best look elsewhere.
HOPE NOW advertises itself as some sort of outreach program, perhaps you’ve seen their ads, “Nothing is worse than doing nothing.” Some who’ve called HOPE NOW might disagree.
HOPE NOW fills a valuable role: they provide secretarial resources for the mortgage servicers. And they provide this service to the lenders at a very low cost.
If this helps some borrowers to avoid falling through the cracks of a poorly-executed loss mitigation system, there is a lot of value in that function.
But for homeowners looking for an advocate who will serve their best interests, HOPE NOW is not the answer.
Hey… what do you want for free?
If you understand that you get what you pay for and are looking for someone to work with you on YOUR behalf and not your lender’s, go here for a better solution to avoid foreclosure.
Filed under HOPE NOW, Loan Modification | No Comments »