Servicers of subprime residential ARM loans have increased their efforts to modify these types of troubled mortgages, according to today’s Moody’s Investors Service report.

The modifications could modestly lower cumulative losses on loan pools backing some mortgage securitizations, although the survey also shows that 40% of the loans modified in the first half of 2007 were at least 90 days delinquent as of March 31, 2008, reflecting principal deferment and arrearage capitalization on seriously delinquent loans.

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