Conclusion

Between October 2007 and January 2008, the mortgage industry established the HOPE NOW Alliance and devoted significant effort to increase public awareness of the resources to prevent foreclosures, to reach borrowers that had been difficult to reach, and to develop new approaches to modify loans more quickly. In addition, the HOPE NOW Alliance has developed a series of data collection projects that we hope will improve the ability to analyze servicer performance. 

As of the end of January, these efforts have not yet made a major difference in preventing unnecessary foreclosures. The vast majority of homeowners with seriously delinquent loans are not on track for a loan work-out of any type. These loans are moving through the system toward foreclosure, leaving investors with increasing inventories of foreclosed homes. Servicers are increasing their use of loan modifications, but this increase is matched by increases in delinquency. Initial efforts to develop systemic approaches are far too limited to make a difference in preventable foreclosures. 

In our previous report, we discussed the refusal of some national banks to provide servicing data, with two citing the advice of the Office of the Comptroller of the Currency (OCC). We called on the OCC to encourage national bank servicers to work voluntarily with the states in this foreclosure crisis. On February 29, 2008, the Comptroller announced that some of the largest national banks will be providing mortgage servicing data to the OCC on a monthly basis. We encourage the OCC to aggregate and publish data collected from national banks to complement the State Working Group’s efforts. 

The State Working Group will continue to work with servicers to promote systematic solutions to modify loans in a more streamlined and efficient manner. Without a systematic approach, we see little likelihood that ongoing efforts will make a serious dent in the level of unnecessary foreclosures. 

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