HOPE NOW Alliance: Mortgage industry prevented record-high 225,000 foreclosures in October 2008MortgagePress.comHOPE NOW, foreclosures, Faith Schwartz, mortgage modifications
HOPE NOW, the private sector alliance of mortgage servicers,
counselors, and investors that has been working aggressively to
prevent foreclosures and keep homeowners in their homes, today
announced that the mortgage industry prevented 225,000 foreclosures
in October 2008, 13,000 more than the record set last month.
Approximately 1.7 million foreclosures have been prevented by
the mortgage lending industry in the first 10 months of 2008, more
than the approximately 1.5 million prevented in all of 2007. If the
current trend continues, in 2008 the mortgage lending industry will
prevent more than 2.2 million foreclosures, 45 percent more than in
2007. Since July 2007, almost 2.7 million foreclosures have been
According to Faith Schwartz, HOPE NOW's executive director, the
October results show that the industry's success at preventing
foreclosures and keeping homeowners in their homes is accelerating.
"Our efforts to streamline the foreclosure prevention process are
clearly working," she said. "HOPE NOW members are helping more
homeowners avoid foreclosure than ever before."
In October, mortgage servicers helped prevent foreclosures by
completing 225,000 mortgage workouts, which include both
modifications to the terms of existing mortgages and payment plans.
Barring an unforeseen life event such as a job loss, death, or
illness, all workouts are intended to enable a homeowner to remain
in his or her home as long as he or she wishes to do so.
The 103,000 mortgage modifications and 122,000 payment plans
completed in October set new monthly records in each category.
Over the past three months, the number of modifications has
increased by 24 percent while the number of payment plans has
increased by 9.8 percent. This increasing reliance on modifications
rather than payment plans is expected to continue as economic
"The growing use of loan modifications is not an accident,"
Schwartz said. "The U.S. economy is still troubled and that means
that changing the terms of a loan is an increasingly appropriate
way to keep more homeowners in their homes. HOPE NOW members are
likely to continue to consider them as long as the broader economy
continues to struggle."
The HOPE NOW October data also shows:
• For the first time, HOPE NOW members and the broader
industry prevented more than 200,000 foreclosures in two
• Nearly 31 percent of the homeowners with prime loans who
received workouts in October received modifications.
• Nearly 57 percent of the homeowners with subprime loans
who received workouts in October received modifications.
• The number of foreclosures leveled off in October. The
number of foreclosures started was approximately the same in
October as in September.
• October foreclosure starts were below the monthly amount
recorded April through August and at the same level as those
recorded last February and March.
• For the fifth month in a row, the number of foreclosure
starts for prime loans exceeded those for sub-prime.
• Home loans 60-plus days delinquent now represent 4.3
percent of outstanding mortgages and are increasing the fastest in
the prime loan category.
A summary table of the results is attached and can be found by
For more information, visit www.hopenow.com.