Hope Now Sees Loan-Mod Progress

Nearly half of all loan workouts on subprime mortgages in January and February involved loan modifications, according to the latest update by Hope Now servicers. The new data show that servicers modified 81,885 subprime mortgages in the first two months of the year, compared with 90,420 subprime borrowers who ended up in repayment plans. Only 30% of troubled prime borrowers got a loan modification that included a reduction in their mortgage payments. Federal regulators have been pressing servicers to modify subprime adjustable-rate mortgages by freezing the interest rate at the starter rate. Hope Now also reported that 60,000, or 43%, of 2/28 and 3/27 subprime ARMs that were scheduled to reset in January and February had been paid off. These loans were "paid in full through refinancing or sale," the Hope Now update says.