Mortgage servicers are preventing an increasing number of foreclosures by modifying loans, according to a new industry report. Loan delinquency continued to increase — though repossessions eased late last year.
Residential delinquency of at least 60 days was 5.23 percent on Dec. 31, HOPE NOW reported today. Delinquency increased from 4.14 percent at the end of the third quarter and 3.17 percent at the end of 2007. In November, delinquency was 4.91 percent.
Subprime delinquency ended last year at 17.4 percent, while prime delinquency was 3.56 percent.
The latest results were extrapolated from data submitted by 26 servicers, including 22 subprime servicers, that account for around 38.7 million in loans.
Foreclosures were started on 2.2 million mortgages in 2008, rising from 1.7 million a year earlier.
There were 917,964 foreclosure sales last year, with slightly more than half of the repossessions occurring on subprime mortgages. Foreclosure sales were around 551,000 in 2007.
Last year, 2,270,651 workouts were completed, up nearly half from 2007. Since the program launched in July 2007, almost 3.2 million foreclosures have been prevented.
Modifications were completed on 968,859 mortgages during 2008, including 702,126 subprime modifications. Repayment plans accounted for the remaining workouts.
In just the fourth quarter, 557,000 foreclosures were started, lower than 564,000 in the third quarter and 572,000 in the fourth-quarter 2007.
Fourth-quarter foreclosure sales were 204,943, falling from the prior quarter’s 263,326 but higher than 168,213 in the fourth-quarter 2007.
Workouts in the latest quarter totaled 671,728, climbing from 591,340 in the previous period and 481,998 the previous year. Modifications accounted for 322,105 of fourth-quarter workouts.
December foreclosure starts were 203,000, climbing from 169,000 in November and 202,000 a year earlier.
December REOs totaled 55,608, falling from 69,075 the prior month and around 46,000 a year earlier.
Last month, 238,787 workouts were completed — a record. Workouts increased from 207,648 in November and around 150,000 in December 2007.
Included in December workouts were 121,876 modifications, increasing from 99,823 in November and accounting for more than half of monthly workout activity for the first time. Subprime modifications were 84,937 — accounting for more than two-thirds of last month’s modifications.
