Mortgage servicers have picked up the pace of modifying subprime loans to assist borrowers who are in trouble, according to the Hope Now Alliance. "Servicers were modifying loans during the fourth quarter at triple the rate of the third quarter," Hope Now executive director Faith Schwartz told a congressional panel. The first loan workout report compiled by the Mortgage Bankers Association showed that servicers modified only 12,740 subprime adjustable-rate mortgages in the third quarter by reducing the interest rate or principal amount of the mortgages. These results were disappointing, and regulators urged the subprime servicers to pick up the pace on loan modifications. The Hope Now alliance is collecting the workout data for future reports, which will measure trends in delinquencies and resolution outcomes, Ms. Schwartz testified. "We want to provide consistent and informative data reports based on common definitions and to provide information that provides insights into the nature and extent of the current subprime mortgage crisis and helps in the development of workable solutions that avoids foreclosures whenever possible."
