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Hope or hype? The success of the Hope Now Alliance

By   |  Posted in Loan Modification & Help

Hope Now was established in July 2007 to help homeowners with unaffordable subprime mortgages get help. Borrowers who called the program's hotline would be plugged into credit counselors and lenders' loss mitigation departments who would ideally help them. The effort was roundly criticized in its early stages, but three years later, its success rate appears to be improving.

Hope Now is an alliance of mortgage servicers, investors, mortgage insurers and nonprofit counselors that was encouraged by the federal government to provide private-sector solutions to the mortgage modification problem.

Is the program working?

Initially, Hope Now did not appear to be making a dent in the foreclosure problem in the U.S. Industry analysts Fitch Ratings issued the following statement: "Fitch has seen little evidence to date that these alternatives have helped mitigate foreclosure rates." Why the apparent lack of success? Critics charge that it's because the effort is run by the very folks who were a big part of the mortgage problem, and are thus not really equipped to provide a viable solution. Initial attempts by Hope Now did not often include loan modifications; lenders favored putting delinquent borrowers on repayment plans instead. Arrearages were merely added to the balance and monthly payments increased to cover the repayment. So those who couldn't afford their mortgage payments before were somehow expected to pay even more each month.

Hope for Hope Now

Today, the program administrators can claim some measure of success; in fact, judging by the sheer number of completed modifications, Hope Now has a much better record than HAMP does. As of April 30, 2010, the number of these proprietary modifications from the inception of the program is 2,749,869, and the number of HAMP loan mods for the same period was just 299,092! It's worth noting that HAMP didn't get going until 2009. Ultimately, the success of a modification is determined by how well it solves the problem; that is, did the modification stick? That will have to be assessed at a later date.

Faith Schwartz, senior advisor for Hope Now, is enthusiastic. "Our data continues to show that the industry's comprehensive loan modification efforts are making significant headway," she said. "The total number of modifications, including HAMP, show that more than three million homeowners have received modifications since 2007."

Today, nearly 64 percent of the mortgage modifications granted this year have been non-HAMP mods. For those who don't qualify for HAMP -- for example, because your property involved isn't a primary residence (25 percent of foreclosure properties are investments) or the loan amount is too high for the HAMP program -- Hope Now provides a viable alternative. A HAMP mortgage modification is not the only solution in town.

The Hope Now portal

Hope Now's LoanPort is a website that puts all the program's resources into one place. If you need help with your mortgage, you can find a free financial, credit or mortgage counselor in your area. The site cautions desperate homeowners not to fall for modification scams. Counseling obtained through the site is always free. You can request help directly through your mortgage lender; the site provides links and phone numbers. There is an online mortgage help intake form that you can complete and submit to request a modification from your lender. There are lists of Hope Now events that you can attend to get help. There is a directory of participating lenders' websites. There is also a self-assessment that you can complete to see if you qualify for a HAMP modification. Desperate and in a hurry? Call the Hope Hotline at 888-995-HOPE. Some homeowners have managed to save their homes just a few days before the foreclosure sale and get their mortgages modified.

LoanPort also offers tips for those who want to apply for a mortgage modification; for example, how do you calculate your gross income if you are self-employed? You can also find interesting data and reports.

Participating Hope Now lenders

Hope Now does not have any authority to modify your mortgage or force your lender to modify it. The alliance does recognize, however, that it is often in the best interest of everyone involved to preserve homeownership when possible. The following list of lenders are participating in the program.

Acqura Loan Services
American Home Mortgage Servicing, Inc.
Assurant, Inc.
Aurora Loan Services
Bank of America
Bayview Financial
Carrington Mortgage Services, LLC
Citigroup, Inc.
Fannie Mae
Freddie Mac
First Horizon Home Loans
Genworth Mortgage Insurance Corporation
HomEq Servicing
JPMorgan Chase
Lender Business Process Services, Inc.
Litton Loan Servicing
Marathon Asset Management
MetLife Home Loans
Mortgage Electronic Registration System
Nationstar Mortgage LLC
Ocwen Loan Servicing
OneWest Bank
PMI Mortgage Insurance Company
PNC Mortgage
Quicken Loans
Residential Credit Solutions
RoundPoint Financial Group
Saxon Mortgage Services/ Morgan Stanley
Select Portfolio Servicing, Inc.
State Farm Insurance
SunTrust Mortgage, Inc.
Vericrest Financial
Wells Fargo and Company

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