Hope Now Impact On Foreclosures

June 2nd, 2008 | Tags: Mortgage

Hope Now is optimistic about having benefited nearly 183,000 borrowers since April 2008 but the reality is that more foreclosures are drowning many more victims. Hope Now comprises of an alliance between lenders, mortgage servicers, investors and community welfare groups. It claims to have tackled 1.6 million loan modifications since the programme kicked off in July last year. 23,000 more modifications have made till March this year. This shows7.6% increases and is the biggest monthly jump since Hope Now started operations.

Faith Schwartz, of Hope Now takes on a congratulatory tone when he says that these figures “clearly demonstrate that Hope Now is succeeding.”However RealtyTrac reports that in April 243,353 borrowers received foreclosure notices. This is a jump of 65% from the figures of last year in the same month. In all 80,926 families surrendered their houses to foreclosure during April, as reported by Hope Now – a rise of 12% from March last year when the number was 72,024. The trend clearly shows that what had been predicted is now set on course – more than a million families will be homeless before the year comes to a close.

Most of the changes Hope Now effected were 105,000 mortgage repayment plans by which those borrowers who had become delinquent were given time to become current. But the numbers of actual modifications were negligible. By it the monthly payments would have been lowered in a new agreement. In April there were 77,000 total numbers of changes – that is 72% were modifications. It is an increase of 36% from March of this year. Actual modifications are taken to be more lasting than temporary workouts.

Jared Bernstein of Economic Policy Institute commented that it cannot be denied that many are being helped from these modifications but the truth is that there are thousands more who are in need of help. Hope Now is not being able to reach all of them. He said “I still regard this as low-hanging fruit, but it’s helping a non-trivial number of people.’

Meanwhile the general scenario is grim with real estate markets continuing to fall. The national home price index fell by 14.1% in the first quarter in comparison to the previous year’s same period, according to reliable sources. It is at the lowest since 1988. This has put increased pressure on foreclosed or at-risk victims who cannot cope with monthly payments. It cuts off chances of selling or refinancing.