Despite modifications, foreclosures continue to rise

05.02.09
By Nicholas Storie

In spite of efforts by the government to encourage the modifications of troubled home loans, new figures from Hope Now reveal the number of foreclosure filings rose during March.

According to the private sector alliance of mortgage lenders, investors and counselors, a total of 134,000 home loans were modified last month by the industry. In a mortgage modification, homeowners and lenders work out a way to lower monthly payments - usually by reducing interest rates or increasing the term of the loan.

Meanwhile, 115,000 borrowers were granted repayment plans, which mean their payments are postponed but the terms of the mortgage itself are not altered.

"The lending industry is steadily working out solutions for homeowners and keeping as many as possible in their homes," commented Faith Schwartz, Hope Now's executive director.

Still, the organization's figures suggest that the trend of borrowers defaulting on their home loan payments is not set to slow any time soon.

Some 290,000 households received foreclosure starts in March, up from 243,000 in February and the largest number since Hope Now began gathering data in 2007.

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Foreclosure filings rose during March