Mortgage servicers completed 56,000 permanent loan modifications through their own proprietary assistance programs during the month of July, according to figures released Wednesday by HOPE NOW.

July’s tally represents an 11 percent increase over the 50,000 proprietary mods reported during the month of June.

At the same time, both foreclosure sales and newly initiated foreclosures declined, according to HOPE NOW’s monthly study.

Foreclosure sales were completed on 65,000 homes in July, down 11 percent from 73,000 in June. Foreclosure starts declined by almost 5 percent, slipping from 194,000 in June to 185,000 in July.

“We are happy to see an increase in permanent proprietary loan modifications for the month of July. More encouraging is the significant drop in foreclosure sales and starts,” commented Faith Schwartz, executive director of HOPE NOW.

According to HOPE NOW’s survey data, the inventory of mortgage loans 60 or more days delinquent stood at 2.81 million as of the end of July 2011. Loans in this delinquency bucket rose 2 percent in one month’s time, up from 2.75 million in June.

Schwartz says there is an “extraordinary amount of work” being done within the servicing community to educate at-risk homeowners about their options.

Servicers are partnering with local nonprofit organizations and government agencies to support borrower outreach efforts across the country and organize face-to-face events to assist distressed homeowners.

Schwartz also points out that the industry continues to embrace new technologies and evolve customer service operations to meet today’s pressing challenges of unemployment, loss of income, and other financial hardships in order to offer options that are sustainable and realistic for families across the country.

HOPE NOW’s study shows that 80 percent of the proprietary loan modifications completed in July provided reduced principal and interest payments. Sixty percent cut homeowners’ payments by 10 percent or more.

The organization also found that the redefault rate for loans modified under servicers’ proprietary programs is 20 percent. A modified loan is considered to be in default again if it is 90 days past due. HOPE NOW’s assessment is based on loans that have been modified within the last 18 months and are seasoned at least six months.

Schwartz says servicers are doing a “far better job than before” when it comes to modifying loans to ensure the borrower doesn’t fall behind again. Much of that improvement is attributed to the fact that more modifications are resulting in larger payment reductions.

HOPE NOW reports that approximately 605,000 distressed homeowners received permanent loan modifications from January through July of this year. An estimated 422,000 are proprietary and 183,421 have been completed under the government’s Home Affordable Modification Program (HAMP numbers reflect data through June 2011).