New HOPE NOW Data Says 2.3 Million Foreclosures Prevented

MBA (10/2/2008 ) Stokes, Aleis
The HOPE NOW Alliance this morning said its latest data show that its efforts have enabled 2.3 million homeowners avoid foreclosure over the past 14 months.
HOPE NOW, a private sector alliance of mortgage servicers, counselors and investors of which the Mortgage Bankers Association is a founding member, said in August alone mortgage servicers helped homeowners avoid foreclosure by completing more than 189,000 mortgage workouts.

“Without HOPE NOW, the current mortgage and financial crises would be more serious and harder to turn around,” said HOPE NOW Executive Director Faith Schwartz. “We will continue to work hard to help homeowners and stabilize communities.”

Workouts include both modifications to the terms of existing mortgages and repayment plans. Barring a life event such as a job loss, death or illness, all workouts are intended to enable a homeowner to remain in that home as long as he or she wishes to do so.

The HOPE NOW report estimates that on an industry-wide basis:

● Mortgage servicers have helped 2.26 million homeowners avoid foreclosure since July 2007.

● Mortgage servicers provided loan workouts for approximately 189,000 borrowers in August. Approximately 110,000 homeowners received repayment plans; 79,000 received loan modifications.

● Nearly 53 percent of homeowners with subprime loans who received workouts through mortgage servicers received modifications.

A summary table of the results is attached and can be found at http://www.hopenow.com/media/press_release.php.

HOPE NOW also announced today the results of a separate survey of subprime adjustable-rate mortgages with rates resetting in 2008. The results, reported by nine companies representing 60 percent of subprime loans, are as follows:

• Nearly 1.1 million subprime loans were scheduled to reset between January and August 2008.

• Since rates began to reset on these loans in January 2008, those loans that were current at reset and subsequently started the foreclosure process account for 1.2 percent of remaining loans.

• Nearly 91,000 of the 1.1 million loans have been modified. More than 75 percent of these modifications are for five years or longer.

• Nearly 449,000 of the subprime adjustable-rate loans that were originally scheduled to reset during this period were paid in full when the homeowner refinanced the loan or sold the property.

For more information about HOPE NOW, including a full list of members, go to www.hopenow.com.