Several firms recently reported the volume of their modification activity, as did the U.S. Department of Housing and Urban Development. But two firms claim their results are far better than the industry as a whole.
In an annual report to Congress, HUD reported that 23,179 loan modifications were completed on loans insured by the Federal Housing Administration during the second quarter, rising from the first quarter’s 21,835 and 13,368 a year earlier.
Wells Fargo & Co. reported 93,533 trial and completed modifications under the Home Affordable Modification Program as of Oct. 31. Under its own modification program, the San Francisco-based institution reported 309,511 trial and completed home loan modifications this year. Total modification volume climbed 14 percent last month.
In Florida, Citigroup Inc.’s loss mitigation successes outnumbered foreclosures completed by a ratio of almost 16 to 1, a Nov. 17 statement said. In the third-quarter 2008, the ratio was 6 to 1. Around 714,000 workouts have been completed on $79 billion in loans.
Citigroup, which indicated it nationally services $750 billion in mortgages, said it employs around 11,000 people in Florida.
Former Fannie executive Edward Pinto said the HAMP is moving at a “snail’s pace,” with only around 100,000 borrowers expected to complete a modification versus the 500,000 projected.
“It appears mathematically impossible for the administration to meet its announced goal of keeping 3 to 4 million Americans in their homes by preventing avoidable foreclosures with loan modifications, as it would require putting 12 to 22 million loans into trial modifications in an effort to save 3 to 4 million foreclosures,” Pinto said.
First Federal Bank of California reported last month that it has modified nearly 3,000 loans for more than $1.4 billion. During just the third quarter, nearly 900 loans for $0.4 billion were modified. First Federal also said its re-default rate is low, with just 28 percent becoming 30 days past due within 12 months of modification — compared to 66 percent for banks and thrifts.
More than 80 percent of loan modifications offered by Wingspan Portfolio Advisors close, the special servicer’s Chief Executive Officer and President Steven Horne told MortgageDaily.com in a recent interview. In addition, only around 20 percent of its modifications re-default.
“We’re forming a relationship with that borrower,” Horne said. “We’re involving them in the negotiations so they have a psychological stake in the success of it.
“We take the time to make sure that the terms fit their particular financial circumstances so we’re not setting them up for failure immediately.”
