Homeowner Workouts Reach Record Level

HOPE NOW has reported that mortgage servicers provided loan workouts to approximately 183,000 homeowners in April 2008, the highest monthly amount since the program was begun in July 2007. This is an increase of 23,000 from the number of workouts in March 2008. Since July 2007, the industry has helped almost 1.6 million homeowners avoid foreclosure through workouts which include loan modifications and repayment plans. The April report from HOPE NOW said approximately 106,000 of the prime and subprime loan workouts conducted by mortgage servicers in April were repayment plans, while approximately 77,000 were loan modifications. HOPE NOW also said a separate survey of subprime adjustable rates mortgages determined that approximately 603,000 subprime loans were scheduled to reset between January and April 2008. 5.0% of these loans have already been modified. Nearly 63% of these modifications are for 5 years or longer. 45% of the subprime adjustable rate loans that were current at reset were paid in full when the homeowner refinanced the loan or sold the property. A limited amount - 0.3% - of the loans that were current at their date of reset have started the foreclosure process.