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Hope Now, mods and slippery definitions

By Holden Lewis · Bankrate.com
Thursday, April 7, 2011
Posted: 9 am ET

When is permanent permanent? When is a reduction a reduction?

An estimated 87,000 homeowners got "permanent" loan modifications in February, a reduction from January's 100,000 modifications, according to Hope Now, a consortium of mortgage servicers and debt counselors.

Calling a new mortgage modification "permanent" is premature. Perhaps the leaders of Hope Now formerly worked in the hair care industry, where a permanent is really temporary but no one thinks twice about the terminology.

As for the 13 percent reduction in modifications from January to February, consider two things. First, February is 9 percent shorter than January because February has 28 days and January has 31. Yes, January has two national holidays, but servicers still answer their phones.

Second, you would expect a surge of loan mod requests from homeowners in January because they have more time to take care of personal finances after the end of the holiday season. And servicers probably see a gush of loan mod applications in January for the same reason that gyms get a flood of new members in the first month of the year -- people are following up on New Year's resolutions.

Mortgage servicers initiated 180,000 foreclosures in February, according to Hope Now. That's more than double the number of loan modifications granted. I see a few signs of hope now for housing markets.

If you follow me @HoldenL on Twitter an angel will ring a little bell in heaven.

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