134,000 Mortgages Modified in March

U.S. mortgage lenders modified nearly 134,000 mortgages for at-risk homeowners in March for the second month in a row, with foreclosure sales dropped sharply, the private sector HOPE NOW alliance has reported.

Lenders also completed 115,000 repayment plans for homeowners in March, up slightly from the month before. The organization, a private-sector alliance of alliance of mortgage servicers, non-profit counselors, and investors, did not report figures for mortgage refinancings.

"The lending industry is steadily working out solutions for homeowners and keeping as many as possible in their homes," said Faith Schwartz, HOPE NOW executive director. "I expect that these numbers will continue to increase as servicers work with the Obama Administration to implement its Homeowner Affordability and Stability Plan."

Mortgage modifications have been rising in recent months following last fall's collapse of financial markets and the subsequent meltdown of the economy. The March and February figures represent an increase of approximately 27,000 modifications a month over the last quarter of 2008.

Foreclosure sales down sharply

Foreclosure sales were a bright spot in the report, with only 53,000 reported in March, a huge drop from the more than 87,000 reported in February and 68,000 in January. However, the decline could be due in large part to the effects of a voluntary foreclosure moratorium by many lenders in the first two months of the year, which was lifted at the beginning of March.

With the end of the moratorium, foreclosure initiations rose to 290,000 in March, up from 243,000 in February. The March figure is the highest number of foreclosure actions initiated since HOPE NOW began tracking data in 2007.

The HOPE NOW March data does not specifically break out the impact of the Obama administration's recently announced Homeowner Affordability and Stability Plan, which has just begun to be implemented.

HOPE NOW is an alliance among counselors, mortgage companies, investors, and other mortgage market participants. This alliance seeks to maximize outreach efforts to homeowners in distress to help them stay in their homes and will create a unified, coordinated plan to reach and help as many homeowners as possible.