Fewer mortgage mods completed in first half of 2012

Although hundreds of thousands of distressed borrowers capitalized on mortgage modifications so far this year to restructure their home loans into more favorable terms, activity was well below where it was a year earlier.

Although hundreds of thousands of distressed borrowers capitalized on mortgage modifications so far this year to restructure their home loans into more favorable terms, activity was well below where it was a year earlier.

In the first half of 2012, there were 385,468 completed mortgage modifications, according to a report from Hope Now. Although this seems like a significant amount, it was a 28 percent decline from the same period in 2011.

"Hope Now data for the first half of 2012 shows a continued trend of reduced late stage delinquencies, year-over-year," said Home Now executive director Faith Schwartz. "However, efforts and resources have expanded to assist all at-risk homeowners in finding solutions to avoid foreclosure, where possible."

Of all the modifications completed during the first half of the year, roughly 78 percent involved the reduction of monthly principal and interest payments, the report said. Meanwhile, nearly 90 percent ended up with fixed interest rates for at least the next five years.

Although there were fewer modifications completed during the six-month period, mortgage records from Hope Now indicate the delinquency rate declined 10 percent on an annual basis.



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