US mortgage modifications increased in 3rd-qtr - report

NEW YORK, Oct 27 (Reuters) - U.S. mortgage companies increased the number of loans modified to easier terms by 17 percent from the second to third quarter, an industry group reported on Monday.

Loan modifications, which can include lowering interest rates or forgiving principal, rose to 257,444 last quarter from 220,326 in the previous three-month period, according to Hope Now, a group of mortgage lenders, servicers and counselors said in a statement.

Modifications in September reached a record 98,000, up 22.5 percent from August, Hope Now said.

Overall "workouts," including new repayment plans on existing loans, increased to 593,016 in the third quarter from 522,887, the group said.

(Reporting by Al Yoon)