The mortgage industry prevented 225,000 foreclosures in October – 13,000 more than the record set in September – according to HOPE NOW.
The alliance's data show that, for the fifth month in a row, the number of foreclosure starts for prime loans exceeded those for subprime. Nearly 31% of homeowners with prime loans who received workouts in October received modifications, while that number was closer to 57% for homeowners with subprime loans.
Over the past three months, the number of modifications has increased by 24%, and the number of payment plans has increased by 9.8%. This increasing reliance on modifications rather than payment plans is expected to continue as economic conditions warrant. The 103,000 mortgage modifications and 122,000 payment plans completed in October set new monthly records in each category, according to HOPE NOW.
"The growing use of loan modifications is not an accident," says Faith Schwartz, HOPE NOW's executive director. "The U.S. economy is still troubled, and that means that changing the terms of a loan is an increasingly appropriate way to keep more homeowners in their homes. HOPE NOW members are likely to continue to consider them as long as the broader economy continues to struggle."
SOURCE: HOPE NOW