The mortgage industry modified roughly 54,000 loans and began formal repayment plans with an additional 183,000 borrowers, according to a study released by the Mortgage Bankers Association. Meanwhile, foreclosure proceedings began on an estimated 384,000 loans during the quarter. According to the MBA, 63% of the foreclosures were cases in which the borrower did not live in the home, did not respond to repeated attempts by the lender to contact him, or the borrower failed to perform on a repayment plan or loan modification that was already in place. Approximately 13,000 ARM loans were modified and 90,000 repayment plans were established in the third quarter, the study found. About 15,000 subprime fixed-rate loans were modified and 30,000 repayment plans established. The study also reported that 166,000 foreclosure actions were started on subprime ARM loans during the third quarter, but about 18% were investor-owned properties, 21% of the cases the borrower could not be located. The study was based on responses from mortgage servicers covering about 33 million mortgage loans, or roughly 62% of outstanding loans.
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