The Mortgage Bankers Association released the results of a first-of-its-kind survey today that found more than 235,000 workouts were initiated by the mortgage industry during the third quarter of 2007. An estimated 54,000 loans were modified, while servicers established formal repayment plans with another 183,000 borrowers, the MBA said. By comparison, foreclosure actions were started on approximately 384,000 loans -- but of those foreclosures, the MBA said that 63 percent were cases where the borrower did not live in the home, the borrower did not respond to repeated attempts by the lender to contact them, or where the borrower failed to perform on a repayment plan or loan modification that was already in place. “The mortgage industry took major steps during the third quarter to help those borrowers who could be helped,� said Jay Brinkmann, MBA's Vice President of Research. "The numbers of loan modifications, negotiated repayment plans established, and other actions to help borrowers are large and compare favorably with the number of foreclosure actions started, particularly when those foreclosures are adjusted to remove the borrowers who clearly could not be helped.� HW readers know there are plenty of borrowers who fit into the "cannot be helped" category. For subprime ARM loans there were approximately 13,000 loan modifications and 90,000 repayment plans established in the third quarter. For borrowers with subprime fixed-rated loans, loan servicers instituted 15,000 loan modifications and 30,000 repayment plans. The report found that while approximately 166,000 foreclosure actions were started on subprime ARM loans during the third quarter, approximately 18 percent of those were on investor-owned properties, and in 21 percent of the cases the borrower either could not be located or would not respond to repeated attempts by the lenders to contact them. Subprime ARM borrowers who already had a repayment plan or loan modification in place but were unable to avoid default anyway accounted for 40 percent of the subprime ARM foreclosures. “It is likely that the number of loan modifications for subprime ARMs will continue to grow through the outreach efforts of the industry,� Brinkmann said. Cases where the borrower could not be located or would not respond to attempts by the mortgage servicer to contact them accounted for 21 percent of subprime ARM foreclosure starts, 21 percent of subprime fixed-rate foreclosure starts, 17 percent of prime ARM foreclosure starts and 33 percent of prime fixed-rate foreclosures started. I'll be posting some commentary and analysis on these numbers shortly. For more information, visit http://www.mortgagebankers.org.