Fewer Foreclosure Victims Helped By Lenders In May

July 7th, 2008 | Tags: Foreclosure Victims

The mortgage industry has released figures that show fewer foreclosure victims have been helped in May in comparison to April 2008. In May the number receiving help touched 170,000. It was a decrease of 7% from the month before.

The timing of the release of the figures comes at a time when legislative steps are being taken to help millions across the country at risk from foreclosures. The legal measures will become effective as soon as the Congress votes it through. The government is putting pressure on the mortgage industry to show more concrete results about helping borrowers.

The numbers of foreclosures are rising across the country with concentrations in certain localized pockets. Hope Now – an alliance consisting of mortgage groups and its servicers backed by the Bush administration, noted that that the month-by-month decrease was an anomaly in statistics. It does not give the true picture, as the lenders are not falling behind their targeted schedule of helping 519,000 house owners during the second quarter of the current year. Although admittedly there has been a drop in help figures in May from April, it will be made up in the near future, said Stan Collender speaking on behalf of the mortgage lenders.

Hope Now has recently adopted certain uniform guidelines that will streamline and expedite the process of helping foreclosure victims. Their estimate is that 1.7 million have been benefited and avoided foreclosures till July. The figures of just one month do not tell the whole tale. “You can’t conclude based on the May numbers that the number of modifications are going down.” Commented Collender. He felt that the curve is moving upward and the target is to keep it that way. As many as possible are being helped.

But not all are satisfied with these platitudes. Many non-profit housing counseling groups says the assessment is too rosy. House owners have been receiving the kind of help that are temporary and will not be of effective use in the long run.

In May 100,000 of the house owners who got help went through repayment plans by which they got time to catch up with the over due payments. 70,000 of the loans underwent modification. The latter is the best option according to the housing councilors. Modification meant decrease of interest as well as mortgage amount.

A housing advocacy group named The California Reinvestment Coalition, made their own survey. The efforts of the lenders were not up to the expectations of counselors.