HOPE NOW, the private sector alliance of mortgage servicers, counselors, and investors that has been working aggressively to prevent foreclosures and keep homeowners in their homes, announced that the mortgage industry prevented 225,000 foreclosures in October 2008, 13,000 more than the record set last month.

Approximately 1.7 million foreclosures have been prevented by the mortgage lending industry in the first 10 months of 2008, more than the approximately 1.5 million prevented in all of 2007. If the current trend continues, in 2008 the mortgage lending industry will prevent more than 2.2 million foreclosures, 45 percent more than in 2007. Since July 2007, almost 2.7 million foreclosures have been prevented.

According to Faith Schwartz, HOPE NOW's executive director, the October results show that the industry's success at preventing foreclosures and keeping homeowners in their homes is accelerating. "Our efforts to streamline the foreclosure prevention process are clearly working," she said.

In October, mortgage servicers helped prevent foreclosures by completing 225,000 mortgage workouts, which include both modifications to the terms of existing mortgages and payment plans. Barring an unforeseen life event such as a job loss, death, or illness, all workouts are intended to enable a homeowner to remain in his or her home as long as he or she wishes to do so.

The 103,000 mortgage modifications and 122,000 payment plans completed in October set new monthly records in each category.

Over the past three months, the number of modifications has increased by 24 percent while the number of payment plans has increased by 9.8 percent. This increasing reliance on modifications rather than payment plans is expected to continue as economic conditions warrant.

"The growing use of loan modifications is not an accident," Schwartz said. "The U.S. economy is still troubled and that means that changing the terms of a loan is an increasingly appropriate way to keep more homeowners in their homes. HOPE NOW members are likely to continue to consider them as long as the broader economy continues to struggle.

The HOPE NOW October data also shows:

* For the first time, HOPE NOW members and the broader industry prevented more than 200,000 foreclosures in two consecutive months.
* Nearly 31 percent of the homeowners with prime loans who received workouts in October received modifications.
* Nearly 57 percent of the homeowners with subprime loans who received workouts in October received modifications.
* The number of foreclosures leveled off in October. The number of foreclosures started was approximately the same in October as in September.
* October foreclosure starts were below the monthly amount recorded April through August and at the same level as those recorded last February and March.
* For the fifth month in a row, the number of foreclosure starts for prime loans exceeded those for subprime.
* Home loans 60-plus days delinquent now represent 4.3 percent of outstanding mortgages and are increasing the fastest in the prime loan category.