Mortgage Modifications Near 5 Million

Banks and mortgage servicers not associated with the government’s Making Home Affordable program have made more than 4 million mortgage help mortgage modifications to home mortgage borrowers, according to the private agency organizing the efforts.

There were about 56,000 modifications made in July through organizations associated with the group, the latest month available, Hope Now representatives say. The figure represents an 11% increase over June numbers. The private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors have quietly been gaining headway to help homeowners at risk of foreclosure in efforts to keep more mortgage borrowers in their homes.

Hope Now has been making modifications since 2007. Permanent modifications made through the government’s Home Affordable Refinance Program (HARP) increased a similar 11% in June to a total of 838,400 since the program was started by the Obama administration. The two major programs combined total almost 5 million modifications.

Foreclosure sales also dipped during the last few months as legal problems for banks and mortgage companies associated with the illegal handling of foreclosures led to the slow down. However, foreclosure sales are expected to increase with more than 4-million homes in default of their mortgages or in the foreclosure pipeline, according to industry data providers.

“We are happy to see an increase in permanent proprietary loan modifications for the month of July,” said Hope Now executive director Faith Schwartz. “Hope Now servicers continue to partner with the non-profit community and the government to maximize outreach to borrowers across the country.”

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Mortgage modifications made directly by banks and mortgage servicing companies are improving, according to Schwartz. The lending industry is also making gains to handle the foreclosure crisis with the hiring of new employees and computer software to improve their handling of the record volume of problem mortgages.

“The industry continues to evolve its customer service operations to meet the challenges of unemployment, loss of income and other financial hardships in order to offer options that are sustainable and realistic for families across the country,” said Schwartz.

Combined the government’s giant mortgage lenders, Fannie Mae and Freddie Mac completed nearly 1.8 million foreclosure prevention actions since the beginning of conservatorship in 2008, but only half resulted in loan modifications.