I originally posted this on www.helpUmodify.net on November 4th, 2008.

I ran into this article today on the MarketWatch website and had to pass it along to you.  The California Department of Corporations has released the results of a Mortgage Servicers Survey desiged to get more detailed information about resolved loan workouts and modifications.

Following is a telling excerpt from the story that indicates what was discovered:

The third quarter results show that both the total number of loan workouts initiated and the number of loan workouts closed have increased. Especially important is that the total number of loan modifications — the type of workout most beneficial to consumers — rose significantly to 14,060 in September, the highest monthly count since reporting began. Also important is that modifications as a share of total workouts passed 50% for the first time in September.

As it is encouraging to see that the number of modifications is on the rise, I found several telling signs that there is still much to do in regards to complying with the FHA HOPE for Home Owners, foreclosure prevention program.

From January to June of 2008 there was an average of just over 50,000 workouts initiated a month.  From July to September, that number jumped to just over 77,000.

What I found to be very useful was the breakdown of what options were most prominent as loan modification options.  Here are a few that stood out:

• Short sale as the result of a modification initiation went from 5.69% in January to 13.41% in September
• Workouts, which include freezing or reducing interest rates, extension of terms and reduction in principal balance made up 36% of results in January and rose to over 50% in September .
• Interest rate reductions at or below the initial/start rate made up 20% of those workouts
• Principle reductions (similar to HOPE for Homeowners) made up only .28% in September

This is very valuable information as it shows some interesting trends.  Click here for the complete report from the DOC.  If you have any questions about loan modifications or loan workouts, I highly recommend you visit www.helpUmodify.org to research your options.

Be sure to take advantage of the free loan analyzer option available and if a modification or workout is the best option for you, www.helpUmodify.org operates as a “not for profit” business with a reasonable progressive payment schedule to cover the cost of labor and operations during the negotiation process.  You can get details on the site.