Logout / Access Other products Drop Down Arrow
Get live help Monday-Friday from 7AM-7PM ET (12PM-12PM GMT)  •  Contact Us
Check out our new FAQ section!
RSS Feed
Differences Among Loan Modification Data
Friday, 24 Jul 2009 11:34 ET
By Matthew Hopkins, Michael Zoller
Summary
The three main sources for mortgage loan modification data are HOPE NOW, FHFA, and OCC/OTS. Each of these entities uses a unique set of definitions and measurements to report mortgage loan modification data.
Detail

 

 

There are three main sources for mortgage modification data: HOPE NOW, FHFA, and OCC/OTS. HOPE NOW is a mostly-private industry consortium. Members include counselors, mortgage companies (like HSBC and Citigroup), trade associations (American Bankers Association), mortgage insurance companies, and public investors (Fannie Mae and Freddie Mac). The Federal Housing Finance Agency (FHFA), the successor to the Office of Federal Housing Enterprise Oversight, regulates the nation's housing finance system through Fannie Mae, Freddie Mac, and 12 Federal Home Loan Banks. The Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS) regulate national banks and federal savings associations, respectively. Both offices are under the purview of the Department of the Treasury.

Since the beginning of the year, HOPE NOW and FHFA have been reporting their data monthly. Previously, they had been reporting quarterly. Meanwhile, OCC/OTS continues to report only quarterly. Both, OCC/OTS and FHFA report data only at the national level. HOPE NOW also reports national data; in addition, they also report data at the state level.

  FHFA only reports data provided by Fannie Mae and Freddie Mac, and does not include the 12 Federal Home Loan banks. More than 3,000 servicers report data to Fannie Mae and Freddie Mac. But, the FHFA report accounts for the least number of loans serviced. The OCC/OTS report, with only 13 (previously 14; due to mergers and acquisitions) servicers reporting data, covers about 10% more loans. Meanwhile, HOPE NOW is even larger. Collectively, the members of HOPE NOW account for nearly 75% of all outstanding mortgages in the U.S.

 

Only OCC/OTS analyzes loan-level data. Both FHFA and HOPE NOW analyze aggregate data submitted by its reporting members. HOPE NOW extrapolates the 38.6 million loans submitted to an estimated total loan count of 54.1 million. Neither OCC/OTS nor FHFA extrapolates their data. Despite these differences, the data reported by each entity will be similar since many servicers report to more than one of the data collectors. Obviously, there is some overlap in the data.

 

One key difference among the three modification data sets is how nonprime is defined. There are no standard industry definitions for non-prime loans. FHFA and OCC/OTS both define prime mortgages as those with a FICO score higher than 660. All other loans are classified as nonprime in the FHFA report. In the OCC/OTS report, those loans with a FICO score between 620 and 659 are Alt-A loans, while those with scores below 620 are subprime. Any loans without an accompanying FICO score are classified as "other" in the report. HOPE NOW does not have a formal definition of either prime or subprime. Instead, each servicer is asked to provide data on prime and subprime loans, dividing the groups based upon the servicer's own internal definition. While it is likely that each company defines prime and subprime differently, these differences should be consistent over time.

 

The definition of delinquency differs among each entity. HOPE NOW uses the Mortgage Bankers Association that a loan is delinquent when payments are at least 60 days past due. FHFA, in addition to loans 60 days past due, includes those mortgages in the process of foreclosure or bankruptcy in its measure. In contrast, OCC/OTS does no include mortgages in foreclosure or bankruptcy. The standard for delinquency according to OCC/OTS is a loan more than 60 days past due or a loan that is both 30 days past due and the borrower is in the process of bankruptcy. In addition to reporting 60 day delinquencies, both FHFA and OCC/OTS separately report delinquencies that are 90 days past due.

 

Definitions of modifications and repayment plans are somewhat uniform across the three entities. Each adheres to some variant of the definition that a modification occurs when any term of the original loan is permanently altered. Similarly, each entity reports data on repayment plans, which are universally defined as a plan, appropriate for the borrower, which allows the loan to become current through catch up payments. HOPE NOW only reports these two sets of data. OCC/OTS and FHFA, in addition to the repayment plans and loan modifications, also report on various types of loss mitigation plans. These include short sales, deeds in lieu, and forbearance plans.

 

Each entity also reports foreclosures initiated and completed. These classifications are applied by each servicer according to their own standard. Most banks count a foreclosure as initiated when the delinquent loan has been referred to an attorney to begin the legal process of foreclosure. Similarly, most banks record a foreclosure as completed when the foreclosed home is sold, usually at a sheriff's sale. Nearly half of all foreclosures initiated are never completed, as the borrower becomes current, the loan is paid in full through the sale of the property, the loan is modified in some way, or the servicer accepts a deed in lieu or a short sale. Neither short sales nor deeds in lieu of foreclosure are counted as foreclosures completed by any of the three entities.

The relatively new Home Affordable Modification Program (HAMP) led to a decline in the number of loan modifications in April and May according to both HOPE NOW and FHFA. Modifications under HAMP require the completion of a three month waiting period before a loan is recorded as modified by the servicer. In the interim three months, each of the three entities reports these loan alterations as payment plans (resulting in a bump-up in payment plan initiated in April and May).

Moody's Economy.com has some of the mortgage modification data in DataBuffet. A table of all the data and mnemonics is available in the DataBuffet News section.

 ·  FHFA - Federal Housing Finance Agency (www.fhfa.gov)

·  HOPE NOW - An alliance between HUD-certified non-profit counselors, mortgage companies, and other market participants (www.hopenow.com)

·  OCC - Office of Comptroller of the Currency (www.occ.treas.gov)

·  OTS - Office of Thrift Supervision (www.ots.treas.gov)

 

Description

HOPE NOW

GSEs

OCC & OTS

Total servicers reporting

26

3000+

14

Total Loans Services

53,000,000+

30,000,000+

34,000,000+

Coverage

National, State

National Only

National Only

Frequency

Monthly

Monthly

Quarterly

Prime/Nonprime

Servicer Defined

Prime: FICO score 660 and higher

Nonprime: FICO score 659 and lower

Prime: 660 and higher

Alt-A: FICO Score 620-659

Subprime: FICO score 619 and lower

Other: loans without a FICO score

Delinquency

Payments 60 days past due

Payments 60 days past due plus loans in foreclosure or bankruptcy

Payments 60 days past due or both 30 days past due AND borrower is in bankruptcy

Reports 90 Delinquencies?

No

Yes

Modification

 

Occurs when any term of the original loan is permanently altered 

 

Payment Plan

 

A plan, appropriate for the borrower, which allows the loan to become current through catch up payments

 

Foreclosure Initiated

 

Occurs when a loan has been referred to an attorney to being the legal process of foreclosure

 

Foreclosure Completed

 

Occurs when the foreclosed home is sold, usually at a sheriff's sale; excludes deeds in lieu and short sales

 

Types of Data Reported

 

Delinquencies,

Foreclosures Initiated, Foreclosures Completed, Payment Plans, Loan Modifications Completed

 

Delinquencies,Foreclosures Initiated, Foreclosures Completed, Payment Plans, Loan Modifications Completed, Short Sales, Deeds in Lieu

 

 

 

 

Description
Mnemonic    
Overall Mortgage Portfolio HOPE NOW GSEs OCC & OTS
Total servicers reporting, (#, NSA) XHFAHNOMTSQ.US XHFAGSEOMTSQ.US XHFAOCCOTSOMTSQ.US
Total servicing loans, (#, NSA) XHFAHNOMTLQ.US XHFAGSEOMTLQ.US XHFAOCCOTSOMTLQ.US
Average loan balance, ($, NSA)   XHFAGSEOMALQ.US XHFAOCCOTSOMALQ.US
Composition of Total Loans      
Prime, (% of loans, NSA) XHFAHNOM%PRQ.US XHFAGSEOM%PRQ.US XHFAOCCOTSOM%PRQ.US
Nonprime, (% of loans, NSA) XHFAHNOM%NPQ.US XHFAGSEOM%NPQ.US XHFAOCCOTSOM%NPQ.US
Delinquent Mortgage Composition      
60+ Days delinquent including FIPs, (# of loans, NSA) XHFAHNDMQ60Q.US XHFAGSEDMQ60Q.US XHFAOCCOTSDMQ60Q.US
60+ Days delinquency including FIPs, (% of loans, NSA) XHFAHNDM%60Q.US XHFAGSEDM%60Q.US XHFAOCCOTSDM%60Q.US
90+ Days delinquent including FIPs, (# of loans, NSA)   XHFAGSEDMQ90Q.US XHFAOCCOTSDMQ90Q.US
90+ Days delinquency including FIPs, (% of loans, NSA)   XHFAGSEDM%90Q.US XHFAOCCOTSDM%90Q.US
New Foreclosures Initiated      
# of loans XHFAHNFIQQ.US XHFAGSEFIQQ.US XHFAOCCOTSFIQQ.US
% of loans XHFAHNFI%Q.US XHFAGSEFI%Q.US XHFAOCCOTSFI%Q.US
% of 90+ days delinquent including FIPs   XHFAGSEFI%90Q.US XHFAOCCOTSFI%90Q.US
Foreclosures Completed      
# of loans XHFAHNFCQQ.US XHFAGSEFCQQ.US XHFAOCCOTSFCQQ.US
% of loans XHFAHNFC%Q.US XHFAGSEFC%Q.US XHFAOCCOTSFC%Q.US
% of 90+ days delinquent including FIPs   XHFAGSEFC%90Q.US XHFAOCCOTSFC%90Q.US
% of foreclosures initiated XHFAHNFC%FIQ.US XHFAGSEFC%FIQ.US XHFAOCCOTSFC%FIQ.US
Payment Plans Initiated      
# of loans XHFAHNPPQQ.US XHFAGSEPPQQ.US XHFAOCCOTSPPQQ.US
% of 60+ days delinquent including FIPs XHFAHNPP%60Q.US XHFAGSEPP%60Q.US XHFAOCCOTSPP%60Q.US
% of 90+ days delinquent including FIPs   XHFAGSEPP%90Q.US XHFAOCCOTSPP%90Q.US
Loan Modifications Completed      
# of loans XHFAHNLMQQ.US XHFAGSELMQQ.US XHFAOCCOTSLMQQ.US
% of 60+ days delinquent including FIPs XHFAHNLM%60Q.US XHFAGSELM%60Q.US XHFAOCCOTSLM%60Q.US
% of 90+ days delinquent including FIPs   XHFAGSELM%90Q.US XHFAOCCOTSLM%90Q.US
Short Sales Completed      
# of loans   XHFAGSESSQQ.US XHFAOCCOTSSSQQ.US
% of 60+ days delinquent including FIPs   XHFAGSESS%60Q.US XHFAOCCOTSSS%60Q.US
% of 90+ days delinquent including FIPs   XHFAGSESS%90Q.US XHFAOCCOTSSS%90Q.US
Deeds in Lieu Completed      
# of loans   XHFAGSEDLQQ.US XHFAOCCOTSDLQQ.US
% of 60+ days delinquent including FIPs   XHFAGSEDL%60Q.US XHFAOCCOTSDL%60Q.US
% of 90+ days delinquent including FIPs   XHFAGSEDL%90Q.US XHFAOCCOTSDL%90Q.US

 

 

http://www.economy.com/support/blog/buffet.aspx?did=5813C6E5-406D-4062-9FE0-2934AF9AFEFA

http://www.economy.com/support/blog/buffet.aspx?did=36CEA9E3-BAAF-4542-98E3-6D4BE8B72CBC

http://www.economy.com/support/blog/buffet.aspx?did=BA23D995-6CF7-4FC7-B700-C1012441D111

http://www.economy.com/support/blog/buffet.aspx?did=0A773CB3-3B5F-4458-822D-8A15A525BAA8

 

 

Other