An organization created to help consumers avoid home foreclosures said Friday that it helped a record number of people in April. However, the statistics also underlined the increasing number of people at risk of foreclosure, as a sluggish economy and a weak housing sector leave an increasing number of home owners unable to pay their mortgages.
The data also highlighted the increasingly murky outlook for the housing sector, which is still trying to find a definitive bottom after the steep declines it has seen recently.
For some, a murky outlook is better than the clearly bad prospects that marked the housing market earlier in the year. However, despite help from industry organizations, a recovery in the housing sector may come too late for some strapped homeowners.
Federally chartered foreclosure prevention organization HOPE NOW reported a total of 183,000 loan workouts in April, the highest monthly total since the organization's inception in July 2007.
The new total was 23,000 above March's level, bringing HOPE NOW's total to 1.6 million homeowners helped.
HOPE NOW Executive Director Faith Schwartz lauded the numbers in a press release, "These numbers clearly demonstrate that HOPE NOW is succeeding at helping homeowners avoid foreclosure and stay in their homes."
On a darker note, though, the report revealed that over 80,000 homes went into foreclosure last month. This represents an increase from March and makes it likely the country could see around 1 million foreclosures in 2008.
The organization also reported that 106,000 of the prime and subprime loan workouts in April were repayment plans. These repayment plans allow borrowers a longer time to repay the loans without actually reducing the total amount owed.
Some pundits have complained that this form of relief does not totally remove the burden from the borrower. The repayment plans can leave some still vulnerable to resets from their adjustable-rate loans, while others see only a delay of painful decisions regarding their homes.
The remaining 77,000 workouts in April - 42% of the total - were loan modifications, which reduce the loan balance or interest rate.
Falling home prices make re-working mortgages a benefit for many companies, as the current market value for the home becomes less than the mortgage value. Still, some experts - even those in the highest ranks of government regulation - worry that the industry is not structured to accommodate the unprecedented number of people facing possible foreclosure.
Eric Rosengren, president of the Federal Reserve Bank of Boston, said in a speech on Friday, "It is clear that servicers were not set up for the spate of elevated foreclosures we have already experienced, and further increases in foreclosures would certainly test the capacity of servicers to have sufficient staff with the expertise to make loan modification determinations."
He tried to remain upbeat, though, adding, "Nonetheless, I am hopeful that the many mortgage forums that are being organized around the country to try to get servicers and borrowers together to work with problem loans will help some borrowers."
The HOPE now alliance was organized at the very beginning of the housing crisis, just before the subprime markets began to unravel in July 2007. It was formed with the help of Treasury Secretary Henry Paulson and members from Housing and Urban Development. Currently the alliance consists of four counseling organizations, seventeen mortgage servicers and lenders, three investor groups, and ten trade associations.
Data from the housing market has been mixed lately. While sales of newly built homes ticked up in April, there is evidence that home prices continue to fall - a sign that supply and demand have yet to reach a balance.
To many experts, this signals more trouble ahead for the housing market.
A report issued earlier this week offered some shred of hope for those waiting for a housing turnaround. Government data showed that new home sales were up 3.3% for April compared to the previous month.
While the rebound only took the measure off a 17-year low, many experts were willing to take any sign of strength as good news.
As economists Joel Naroff said in a note to clients, "up is always better than down when it comes to the housing market and I will take it."
Naroff also had an upbeat response to falling home prices, saying that "more and more buyers will begin to figure out that there are some bargains out there."
However, this data about home sales was counteracted by another report showing further declines in home prices
Earlier this week the S&P/Case-Shiller national home-price index revealed that home prices plunged at a record pace in the first quarter. The index - a closely watched gauge of housing prices - revealed a 14.4 percent decline from last year. This was the largest drop in the two-decades since the index began recording home prices in 1988.
Last week, a report from the Office of Federal Housing Enterprise Oversight also revealed that U.S. home prices saw their sharpest decline in the 17 years since the government began tracking home data.
OFHEO's seasonally adjusted purchase-only house price index fell 3.1 percent from last year, and declined 1.7 percent from the fourth quarter - the largest quarterly drop on record. Between the third and fourth quarters of 2007, home prices fell 1.4 percent.
The data about home prices are key to many experts, with some high-profile economists predicting further declines.
Jan Hatzius, Managing Director and Chief U.S. Economist of Goldman Sachs, believes that house prices will continue to decline over the next several years, eventually returning to levels seen during the 1990's and the first few years of this century.
Hatzius notes that elevated supply levels for housing have forced home prices lower. In a speech given at a recent conference about the turmoil in the credit market, Hatzius characterized the home price declines as "very sizable," noting that they were down 10% off their highs through the end of last year and down around 15% at this point.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.