Housing Rescue Pace Slows

Hope Now, the mortgage industry alliance of lenders, servicers and housing counselors, reported recently that it helped roughly 170,000 homeowners avoid foreclosure in the month of May. That's down 7% from the 183,000 loan workouts it reported for April.

The group estimates that its members have helped keep 1.7 million homeowners out of foreclosure since July 2007. Repayment plans are considered most effective for borrowers experiencing a temporary financial set back – such as a layoff – in which they fall behind on their mortgage payments.

Housing advocates contend that repayment plans are typically not sufficient to keep today's subprime borrowers in their homes because they don't reduce the borrower's delinquent debt – they simply give borrowers more time to repay their outstanding debt on top of their regular mortgage payments.

While the number of homeowners that Hope Now helped dipped 7% from April to May, the number of homes lost to foreclosure during that same period jumped 35% to 73,000, according to RealtyTrac. Foreclosure filings were up 7% in the same period. That's a trend foreclosure experts expect will continue for the next 18 months.