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Servicer Workout Tally Reaches 2.3 Million

Hope Now, an alliance of mortgage servicers, counselors and investors, said member companies have prevented 2.3 million foreclosures during the past 14 months through a mix of repayment plans, forbearance and loan modifications.

And the organization's executive director says that in recent months the data have shown the share of loan modifications growing in importance as a workout tool, especially among subprime borrowers.

In August alone, the alliance said that member servicers completed 189,000 mortgage workouts, which include both repayment plans and modifications, which change the original terms of the loan.

The August total included 110,000 repayment plans and 79,000 loan modifications, Hope Now said.

Faith Schwartz, executive director of the Hope Now alliance, told that the latest performance data illustrate that mortgage servicers are continuing to work hard on helping troubled homeowners.

She particularly cited data related to subprime loans as evidence that servicers are reaching out to more and more borrowers with options that provide more relief than traditional, short-term repayment plans.

Ms. Schwartz, who is speaking on a panel at the upcoming MBA convention, said that quarterly data from the alliance are more meaningful than the monthly numbers, which can be affected somewhat by the length of the month or other extraneous circumstances.

One positive sign that servicers are making inroads in helping borrowers stay in their homes is the rising number of modifications involving subprime loans, Ms. Schwartz said.

When Hope Now was first getting started, just about 18% of subprime workouts involved loan modifications.

Now, modifications account for more than half of subprime loan workouts.

Ms. Schwartz said she isn't surprised that the modification trend has shown up most sharply in the subprime sector.

"Early on, that was the focus. It was what needed the most attention," said the Hope Now executive.

Over time, she said she expects the modification share of workouts on troubled prime loans to rise as well.

At the upcoming MBA convention, she expects the government's response to the financial crisis to be a center of discussion.

Ms. Schwartz said the Hope Now alliance is monitoring legislative and regulatory developments.

She said attendees at the upcoming convention will also want to focus attention on the enormous changes that have shaken the industry.

Lenders will be eager to begin sorting out what those changes mean and how they will be affected going forward.

"If you look at the year in review, it's been a big year for mortgage servicers and lenders," she said.

And in the meantime, Hope Now members are going to stay focused on reducing foreclosures and keeping as many borrowers as possible in their homes, she added.

But housing market conditions and payment resets continue to take a toll on many borrowers.

The Hope Now data also show that participating servicers tallied 914,390 foreclosure sales during the 14-month period. During the month of August, foreclosure sales totaled 86,594.

Washington-Hope Now, an alliance of mortgage servicers, counselors and investors, said member companies have prevented 2.3 million foreclosures during the past 14 months through a mix of repayment plans, forbearance and loan modifications.

And the organization's executive director says that in recent months the data have shown the share of loan modifications growing in importance as a workout tool, especially among subprime borrowers.

In August alone, the alliance said that member servicers completed 189,000 mortgage workouts, which include both repayment plans and modifications, which change the original terms of the loan.

The August total included 110,000 repayment plans and 79,000 loan modifications, Hope Now said.

Faith Schwartz, executive director of the Hope Now alliance, told that the latest performance data illustrate that mortgage servicers are continuing to work hard on helping troubled homeowners.

She particularly cited data related to subprime loans as evidence that servicers are reaching out to more and more borrowers with options that provide more relief than traditional, short-term repayment plans.

Ms. Schwartz, who is speaking on a panel at the upcoming MBA convention, said that quarterly data from the alliance are more meaningful than the monthly numbers, which can be affected somewhat by the length of the month or other extraneous circumstances.

One positive sign that servicers are making inroads in helping borrowers stay in their homes is the rising number of modifications involving subprime loans, Ms. Schwartz said.

When Hope Now was first getting started, just about 18% of subprime workouts involved loan modifications.

Now, modifications account for more than half of subprime loan workouts.

Ms. Schwartz said she isn't surprised that the modification trend has shown up most sharply in the subprime sector.

"Early on, that was the focus. It was what needed the most attention," said the Hope Now executive. Over time, she said she expects the modification share of workouts on prime loans to rise as well.

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