Foreclosures Down Even Though Some Government Programs Are Off To A Slow Start

Michael Barr, the Treasury Dept.’s assistant secretary for financial institutions, briefed Congress on the Administration’s various housing related programs on Sept. 9. Barr said 45 loan servicers accounting for 85% of the loans in the country had signed up for the six month old Home Affordable Modification Program (HAMP), which pays servicers to lower the monthly payments of borrowers in distress. Barr said the program is showing early signs of success with 360,000 borrowers signing up for loan modifications.

That’s a drop in the bucket though of the millions originally anticipated. Barr said government related agencies such as Fannie Mae and Freddie Mac have modified 2.7 million loans since the crisis began. He reiterated analysts projections that six million homeowners could lose their homes before the mortgage meltdown ends.

Meanwhile, foreclosure tracker RealtyTrac released data on Sept 10 that showed the number of new foreclosure-related filings sliding slightly—less than 1%—from June. The overall number of filings—356,000— is still up 18% year over year. One positive sign: banks foreclosed on 13% fewer homes in July—for a total of 76,134. “The outflow of bank-owned properties onto the resale market is being more carefully regulated,” said James J. Saccacio, chief executive officer of RealtyTrac. But he noted there is still a record number of delinquent borrowers and foreclosed homes that could come on the market.