Hope Now Gaining in Foreclosure Prevention as Loan Modifications Increase

The Hope Now initiative, a private mortgage lender and servicer alliance, is increasing its effectiveness in preventing foreclosures. In October, Hope Now set a new record in foreclosure prevention modifying 225,000 mortgages. That total exceeds September's loan modifications by 13,000.

Hope Now launched in October 2007 in response to the US Treasury encouraging lenders and servicers to aid troubled homeowners stay in their homes. It was the earliest attempt to make working out millions of troubled viable by streamlining and consolidating loss mitigation processes.

The real question is are the growing number of loan modifications progress or growing trouble? Faith Schwartz, Hope Now Executive Director, released in a statement on the program, "The US economy is still troubled and that means that changing the terms of loans is an increasingly appropriate way to keep more homeowners in their homes."

There is some indication that although loan modification numbers continue to grow foreclosures may be trending to level off, as they did in October. This would imply that loan modifications may be having a positive and gaining momentum in preventing foreclosures.

Ironically enough FDIC Chairman Sheila Bair continues to wage a losing battle to get support from the Bush administration or the US Treasury to broaden the reach of these types of programs. Here current request for $14 billion in TARP funds continues to fall on deaf ears--despite strong Congressional and Democratic support.

Could this change as an Obama administration enters the White House? Early statements from the Obama transition team hint at intense focus on helping the individual homeowner, a u-turn from current Treasury policy moves.