Hope Now, the coalition of major lenders, servicers and consumer advocates has completed 208,000 loan adjustments in November, and say that number will increase to more than 300,000 a month next year.
Some 2.2 million homeowners facing foreclosure will receive foreclosure prevention help this year. With the number expected to rise to more than 3 million next year many critics are predicting a great number of these workouts will fail and many families will lose their homes anyway. This has been showing to be true as it has been reported that as many as half the foreclosures that have been restructured have already gone into default.
Right now there are two types of workouts being offered.
1. There are simple repayment plans. These allow borrowers time to make up missed payments.
2. There are mortgage modifications. This is the more comprehensive and effective of the two types. It involves freezing or reducing interest rates and expanding the time given to repay loans or lowering mortgage balances.
Many of the workouts being issued by Hope Now members are mortgage modifications. These had increased by 29% during the three months ended November 30, while repayment plans increased by just 6%.
Hope Now's critics claim that a lot of the mortgage modifications will prove unsuccessful because they do little to actually lower mortgage payments. The merely freeze rates at unaffordable levels and add missed payments to mortgage balances.
Data released in December has revealed that 51% of those with loan modifications in the second quarter were already delinquent within just six months of the workouts.
The good news is the actual decline in the number of actual foreclosures. There were 69,075 foreclosure sales during the month. That's a 14% drop from October.
I think the next wave of foreclosures is on the way. With unemployment continuing to rise some the workouts could be all for nothing. Obviously, borrowers who don't have jobs can't pay their mortgages.
For free foreclosure prevention advice visit HopeNow.com or call 1.888.995.HOPE.
[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]
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