Loan modifications through the HOPE NOW program increased dramatically in July, soaring 43 percent from the number of completed modifications in June.  HOPE NOW, the voluntary, private sector alliance of mortgage investors, servicers, insurers, and non-profit counselors announced on Wednesday that it had completed 66,002 permanent affordable loan modifications for homeowners during the month compared to 46,208 in June.  At the same time, modified loans are performing at the best level in HOPE NOW's history.

Today's numbers do not include modifications completed through the Home Affordable Modification Program (HAMP) during the month.  These will be reported separately by the Department of Treasury.

Faith Schwartz, Executive Director of HOPE NOW, said the July surge in modifications was "a direct result of the combined efforts of the industry, non-profit community and government on behalf of homeowners across the country."

July modifications bring the total of permanent loan modifications since 2007, both proprietary and through HAMP, to 5.66 million.  This includes 4.62 million homeowners who have received proprietary modifications through July and 1.04 million with HAMP modifications through the end of June. So far this year HOPE NOW has completed 451,000 modifications with July HAMP data still outstanding.

Seventy-one percent of proprietary modifications completed in July included reduced payments of more than 10 percent and 96 percent of the modifications fixed mortgage interest rates for at least five years.  

At the end of July there were 82,333 modified loans that were seriously delinquent for a re-default rate (90+ days delinquent) of 8.9 percent compared to 10.3 percent at the end of June.   This is the lowest rate in the program's history.

HOPE NOW also facilitated 36,260 short sales during the month, bringing the total number of these sales to 974,000 since 2009.  Combined with modifications, HOPE NOW has brought permanent non-foreclosure solutions to 6.63 million homeowners.

Foreclosure sales were initiated on 164,593 loans in July compared to 156,945 in June, an increase of 5 percent.  There were 63,527 foreclosure sales compared to 63,810 in June.

Schwartz, Executive Director sad it was encouraging to see the lower number of re-defaults on modified loans "which we attribute to the higher percentage of sustainable and realistic solutions being offered to homeowners. The state of the economy, geography and modification program types are always contributing factors to the effectiveness of modifications.  It is important to note that HOPE NOW defines re-defaults as loans that are 90+ days delinquent after six months of completing a modification, using a rolling 18 month inventory of completed modifications.