WASHINGTON – The mortgage industry’s efforts to help borrowers having difficulty with their mortgages has allowed more than 1 million homeowners to avoid foreclosure, according to a study released yesterday by “Hope Now,” an alliance representing the providers of 84 percent of current subprime mortgages nationwide.
“The latest Hope Now numbers demonstrate the sheer volume of borrowers who are being helped by servicers across the country,” said Jonathan L. Kempner, president and CEO of the Mortgage Bankers Association, in a statement about the report. “It’s imperative to remember that lenders have every incentive to work with borrowers to help them avoid foreclosure wherever and whenever possible.”
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Since July 2007, 1,035,000 homeowners have received loan workouts – through either loan modifications or a repayment plans – which have allowed them to stay in their homes. The number of loan work-outs is three times the amount of completed foreclosures (350,000), for the period between July 1, 2007 and Jan. 31, 2008.
The study also found that 638,000 borrowers received subprime loan workouts, with subprime modifications increasing from 19 percent of total workouts in the third quarter of 2007, to 35 percent in the fourth quarter, and reaching 50 percent in January of 2008.
Delinquency rates for subprime loans rose from 13.5 percent to 14.1 percent from December 2007 to January 2008, and from 1.5 percent to 1.7 percent for prime loans.
“This is good news on all fronts, and we encourage servicers and industry constituents to keep up the tremendous work as we find solutions to help troubled borrowers, who want to stay in their homes [and] remain homeowners,” said Kempner.
Information about the Hope Now mortgage servicers’ alliance is available from The Financial Services Roundtable at www.fsround.org. Additional information about Hope Now and its Project Lifeline is available from the U.S. Treasury Department at www.treas.gov.
