Approximately 1,035,000 homeowners have received some form of loan workout since July 2007, according to the most recent data released by HOPE NOW Monday morning. Workouts included 758,000 repayment plans initiated and 278,000 loan modifications, the group said.

Eighteen HOPE NOW servicers, covering almost two-thirds of the mortgage industry for both prime and subprime loans, provided the data. The latest look at loan modification activity found that loan modifications made up nearly 50 percent of subprime loan workouts in January, compared to 35 percent in the fourth quarter and 19 percent in the third quarter. Total loan modifications increased 16 percent in January compared to December, HOPE NOW said. “This study found that nearly three times as many homeowners have received a loan workout through loan modifications and repayment plans compared to the number of completed foreclosure sales,” said Faith Schwartz, executive director of HOPE NOW. “We are pleased with this progress and we will continue to focus vigorously on reaching homeowners at-risk in order to avoid foreclosure.” Servicers implemented so-called “fast-track” loan modifications for some subprime borrowers effective January 1, Schwartz added. “Fast-track” modifications were introduced as part of a rate-freeze plan developed by the Treasury and the American Securitization Forum late last year, among others. The result of the rate-freeze program thus far has been a dramatic jump in loan modifications, according to the data. In January, for the first time, subprime modifications are almost equal to the number repayment plans: 45,320 loan modification were recorded, against 48,155 repayment plans. Given the danger that can arise from a strong reliance on repayment plans, a rise in loan modifications should be seen as a net positive according to various sources that spoke with HW. The rise in loan modification activity also comes amid a steep drop in LIBOR rates that have reduced the impact of rate resets for many affected subprime borrowers. Housing Wire reported on the drop earlier on Monday. HOPE NOW underscored the effect of lower rates, saying that the current subprime ARM reset is occurring at an average rate of 8.76 percent; in December, that rate stood at 11.25 percent for most borrowers. Treasury Secretary Henry Paulson and others within the Bush adminstration have been pushing back against recent plans by Senate Democrats to introduce new legislation that would use Federal funds in an effort to address the housing crisis. The adminstration has argued that current initiatives, including the subprime ARM freeze and others, need time to be implemented.