Mortgage brokers have been reported to save a record setting 225,000+ at risk mortgages, helping the borrowers to stay at their homes during the month of October. According to the reports issued by a coalition of mortgage lenders, brokers, services, investors and counselors that assembled to fight the foreclosure crisis across the state.

Hope Now, the coalition, said the number was up 212,000 in the month of September and that its members have helped millions of homeowners to keep their homes. It claims that it has helped a total of 2.7 million borrowers to stay in their homes since July 2007, and that 1.7 million of those were saves just in the upcoming 10 months alone.

The coalition’s director Faith Schwartz said in a report that their efforts of fo3clistyre prevention are clearly working. Their workouts included dividing as-risk mortgages in two different categories – repayment plans and mortgage modification.

In repayment plans, lenders are requested to let the delinquent borrowers sometime where they can make up the missed bills. Borrowers will be allowed to make extra payments each moth for a set of months or payments can be add to the loans term. More than 122,000 out of the total at-risk mortgages helped at October were of this type.

Mortgage modification is so called so as the actual terms of the loan is written. The rewritten terms may include freezing or lower interest rates, extending loan life, or even forgiving some over dues owed by the borrower. Most say it is more viable solution to solve mortgage problems than mortgage repayment plans.

The number of mortgage modifications accomplished over the last few months was high up to 24% where as mortgage repayment plans were 9.8%.

This growing demand of loan modification is not an accident, as said by Schwartz. He says the US economy is still under a great pressure and it means changing loan terms is an appropriate means of keeping homeowners in their homes. The Hope Now coalition has considered keeping the mortgage modification policy unless the countries economy continues to struggle.

Sign of ensuring these efforts made working comes when the number of homeowners lost their homes are counted. The total amount of home repossessed counted around 77,000 from 86,000 the previous month of staring the policy.  Considering this drastic change, Federal Deposited Insurance Corp. announced that it is going to take serious loan modification since its take over on IndyMac Bank.

FDIC also said it would lower payments up to 38% of the gross income of at-risk mortgage borrower by lowering mortgage rates, extending terms and deferring some of the principal amounts. Countrywide Bank, of America, announced similar discussion Citibank, Chase Mortgage, Fannie Mae and Freddie Mac backed loans.

It has been a traditional scenario to see a lending bank reposes the property from the homeowner who defaulted on their mortgage. The lending bank manages the tenancy out and then engages a local Estate Agent to sell the property in an open market in order to minimize the risk of any financial loss on the loan.

The selling agent is usually given six to eight weeks, which varies from lender to lender, to find a buyer for the property. Failing to do so, the lending bank would send the property up for an auction where it is grabbed up by hard-targeted bidders, thus a sure sell of the property.

Though banks are forced to accept lower price on the property due to auctions sometimes, they are the ultimate winners. Firstly, due to the strength of rising house prices, banks are supported of any lower prices. Next is that auction bidders are potential buyers and these buyers realize the current  housing competition in the market, thus auction prices sometime goes up for sharp raised bids. Due to these reasons, an auction sale catches up to make an acceptable difference between the sale price and the true value of the property.

However, real estate reports from the last few month showed that house prices has continued to fall down, thus selling properties at auction did not bring about positive outcome for banks.

This fall in house prices over the last few months, along with their increased cost of living, had a dramatic effect on the increase in property repossessions as more and more homeowners fell into negative equity in their homes.

Reports from The Council of Mortgage Lenders (CML) shows the rate of repossession activities of mortgage lenders has risen by 48% since the last year housing crisis. Homes repossessed in the last six months were reported to be 18,900 – which is up from 12,800 houses repossessed in the same time last year.

At today’s real estate industries, if mortgage lending banks tries to sell a repossessed property at the open market, it would be of no surprise to see banks receiving at least 20% to 3% under market value for the property. This is however, good news for prospective investor purchasers who are disguised in the market to steal a deal of bargain investment. Investors are just steps ahead to fix a deal until they secure a mortgage for the property, until then – the headache is for the lenders. A shift of pattern is forming in the current market.

With all the property market conflicts running at a joint venture, Buy-To-Let Lenders now faces the task for becoming landlords themselves on repossession on a property.

When a landlord defaults on their mortgage, the renter appoints a receiver of the rent and calls a Property Management Department to manage the tenants throughout the fixed term period. The lenders serves as the landlord and fills out every required obligation as previously promised in the tenancy agreement. At the end of the fixed term, despite o repossessing the property and selling it in the open market, it would be to the banks greatest interest to maintain tenancy for the property, and if possible ride tenancy for 12 to 18 months, to get their loan amount at a reasonable pay back. Mortgage lenders stay landlords and stick themselves to the property until the property pays tem their principal loan amount and then the property is sent back in the open market.