Monday, March 30, 2009
CNN reports that about a quarter of a million home mortgages were modified under the Hope Now program during the month of February, allowing these "homeowners" to stick around for at least a little while longer. The bad news is that, during that same period, another quarter of a million homes entered some stage of foreclosure.
The recently announced mortgage rescue plan from the Obama administration has yet to get underway and its impact won't be felt for at least another few months as it takes 90 days for these modifications to be completed, but with home prices still plunging and the job market continuing to weaken, they'll have their work cut out for them trying to stem the tide.
Some details from the report:
In February, nearly 250,000 homeowners received either mortgage modifications or repayment plans from their lenders, according to Hope Now, the coalition of lenders, investors and community advocacy groups put together to combat the foreclosure plague.Who'd have ever thought that things would turn into such a mess?
About 134,000 of the workouts completed were mortgage modifications, which typically lower the interest rate on loans, lengthen mortgage terms or reduce principal owed to make loans more affordable.
But in spite of these efforts, the number of foreclosures started in February rose to 243,000 from 217,000 in January. About 87,000 homes were repossessed by banks during February, a 28% jump from the 68,000 foreclosures completed in January. Since the mortgage meltdown hit in July 2007, 1,395,044 homes have been lost.
February was the second straight month of sharply higher foreclosures; prior to January, the problem appeared to be easing. Foreclosures declined to 69,000 in November from 77,000 in October and then dropped again to 56,000 in December.