The volunteer private sector alliance of mortgage servicers, banks and investors Hope Now has surpassed 5 million mortgage modifications 
since the start of their program, according to the organization.
“When Hope Now started reporting data at the end of 2007, loan modifications were barely measurable,” said Faith Schwartz, executive director of Hope Now. “Homeowners either paid their mortgages or forfeited their homes. However, over the past four years the housing crisis has taught us to re-think helping distressed homeowners.”
Since the organization began nearly five years ago, 5 million loan modifications have been completed for homeowners, including 4.11 million carried out by lenders and mortgage servicers not associated with the Obama administration’s Home Affordable Modification Program.
Nearly another 900,000 modifications have been completed through the government run program. The latest data shows that after six months, more than 80% of homeowners with modifications are able to make mortgage payments on time.
But mortgage defaults have risen to the highest level in two years, according to Trans Union credit, which tracks defaulted home loans. Driven by high unemployment averaging 9% in the U.S. and higher underemployment, foreclosures are projected to increase in 2012 as consumers are forced out of their homes at record rates.
Mortgage modifications handled by banks and mortgage servicers outside of government programs have proven to be more successful than Obama administration programs. But the additional volume of foreclosures that are expected to hit the marketplace next year coupled with bank assisted short sales present roadblocks for the economy, and the housing market to recover.
“Even with low interest rates, demand for houses remains muted,” said Mark Fleming, chief economist for CoreLogic, a real estate data firm. “Home prices are adjusting to correct for the supply-demand imbalance and we expect declines to continue through the winter.”