How many loan modifications have been approved in 2012?

How many loan modifications have been approved in 2012?

The number of loan modifications approved in 2012 is on the decline as compared to the same time frame last year. There was a thirty one percent (31%) decline in the number of loan modifications approved this year as compared to the same time period in 2011, according to report issued on May 7, 2012 by Hope Now.

  • First quarter 2011: 298,449 loan modifications were approved.
  • First quarter 2012: 207,013 loan modifications were approved.

Of the 207,013 loan modifications approved in 2012:

  • 147,000 were proprietary.
  • 60,225 were approved under HAMP.

If you have a Fannie Mae or Freddie Mac loan, you will not receive a principal reduction on your loan modification unless you receive principal reduction funds from some government grant program like the Nevada Hardest Hit Fund. The Nevada Hardest Hit principal reduction program allows up to $100,000 in principal reduction. In order to receive a $100,000 principal reduction, you must qualify for the program and you must have a Fannie or Freddie loan. If you do, Nevada Hardest Hit fund will grant up to $50,000 towards your principal reduction and your servicer must match the other $50,000. Additional conditions and terms apply, so please contact them at (702) 570-5662 for more information.

Combine a possible $100,000 principal reduction with a HARP refinance at 3% and you might just get what you need to afford your payments and keep your house.

Visit the following sites to learn if your loan is a Fannie Mae or Freddie Mac:

If you are currently pursuing a loan modification and you do not have a Fannie or Freddie loan, you should ask your servicer if you have a portfolio loan or a loan held by a private investor. According to a report by the U.S. Treasury Department, these two kinds of loans had the highest possibility of receiving a principal reduction.*

Servicers determine what kind of modification they grant a borrower based on how to achieve the maximum return for their investors. Will you make their investors the maximum return on this loan? That is what the servicer has to decide. Can they count on you to repay this loan over the long haul? Here’s what they weigh:

  • The reduction in cash flow from the reduced loan terms
  • Along with the costs of delaying foreclosure
  • Against whether they believe the borrower will be able to make the payments long term.

Hope Now’s report also indicates that foreclosure starts are down, but that is to be expected since the passage of AB 284 in October of 2011 which now requires the banks to have the appropriate documentation in order to foreclosure on a deed of trust.

How many loan modifications have been approved in 2012

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This guide is provided as a courtesy only. Please check with your tax preparer for any tax implications that may result if you accept a loan modification from your lender. Neither Keller Williams Realty, Marketplace One or Tania Michaels are tax experts.

Source of Graph: Hope Now
Source of trend on principle reductions: OCC Mortgage Metrics Report, First Quarter 2012
, Office of the Controller of Currency, June 2012.