Improvement in Subprime Performance Continues

HOPE NOW is an alliance of counselors, investors and 27 residential servicers that service nearly three-quarters of U.S. mortgages. The report extrapolated data from HOPE NOW members to all of the roughly 53,499,000 residential loans outstanding.

Prime delinquency jumped to 3.97 percent last month from 3.84 in March. A year earlier, late payments on prime mortgages were 1.84 percent.

But subprime delinquency was down for the second month to 17.27 percent from 17.45 percent in March. However, delinquency on subprime mortgages stood higher than 13.07 percent a year earlier.

Servicers started 249,000 foreclosures in April, fewer than 290,000 a month earlier but more than 195,000 a year earlier. So far this year, 999,000 foreclosures have been started.

Foreclosures were started on 162,000 prime borrowers, lower than 189,000 in March but much higher than April 2008’s 96,000. Subprime foreclosure starts were 87, 000, falling from 100,000 in March and in April 2008.

Mortgages that converted to real estate owned jumped to 65,000 last month from 53,000 in March. But new REOs were lower than 80,000 in April 2008. Through April 30, 273,000 foreclosures have been completed.

Prime REOs climbed to 39,000 from March’s 28,000 and the prior year’s 35,000. However, subprime REOs — which edged up to 26,000 from 25,000 in March — sank from 45,000 in April 2008.

Servicers completed 270,000 workouts, increasing from March’s 249,000 and April 2008’s 174,000. During all of 2009, 1,012,000 workouts have been completed.

Workouts included 127,000 loan modifications, off from the prior month’s 134,000 but well above 74,000 in the prior year. The decline from March was partially attributed to the initial implementation of the Obama administration’s Home Affordable Modification Program.

Year-to-date modifications were 518,000.