HOPE NOW is an alliance of private sector mortgage servicers, investors and nonprofit counselors.



The January data marks the first time HOPE NOW modified more than 100,000 mortgages in two consecutive months, as HOPE NOW also modified more than 100,000 loans in December 2008. Faith Schwartz, executive director of HOPE NOW, the figures show the commitment of mortgage lenders in helping avert foreclosures.

Notwithstanding the loan modification efforts of mortgage lenders, Schwartz said foreclosures still continue, as shown in HOPE NOW's data on foreclosures for January. Foreclosure filings in January rose by 14,000 from December 2008 filings and foreclosure sales increased to 68,000 from 56,000 at the end of 2008. Loan modifications were almost half of all remedies granted to borrowers at risk of foreclosures.

In addition to the January data, HOPE NOW has also prepared its loan-level data. Michael Bright, lead statistician of HOPE NOW, said the alliance's loan-level data is being used by the mortgage industry to target homeowners who are really at risk of foreclosures.

Among the details in HOPE NOW's loan-level data are percentage of modifications, number of loans past due, subprime defaults, re-default rates, percentage of homeowner-occupied foreclosures and modifications for mortgages held by Freddie Mac and Fannie Mae.

Mortgage loans which have been in default for more than 60 days reached almost 3 million in January of this year. The percentage of prime loans in default is already rising and has reached nearly 4 percent of all prime mortgages. Throughout the past year, the rate of re-default has increased to about 40 percent. Re-default has been defined by HOPE NOW as a loan in default by more than 90 days after it was modified or a mortgage which has been foreclosed six months after it was modified.

Additionally, the HOPE NOW loan level data also showed that almost 50 percent of all loan modifications in the third quarter of 2008 were for borrowers with FICO scores lower than 620, a risky rating. More than 17 percent of all loan modifications are owned by Freddie and Fannie Mae. About 25 percent of all residential properties lost to foreclosures were owned by investors and not owner-occupied.