Modified mortgages are still defaulting after loan reduction

December 22, 2008 by · Leave a Comment
Filed under: Real Estate News 

I guess when you get a lower loan payment but lose your job you still can not afford to pay your mortgage.  Big surprise huh?  I am not making light of such a situation because it is a tragic event that is happening daily.  What I am trying to put light on is the fact that this whole “bailout” has been a failure and was never going to work because it was aimed at preserving a failed system and to give help to the people who created this crisis in the hopes that it would trickle down to mainstreet like some sort of “golden shower” if you ask me.  (Please forgive the comment but at this point that is how it feels).

Personally I have come up with a number of solutions(a website for this is in the works) but the problem is they are so drastic that I don’t think any of our elected leaders have the courage or fortitude to see them through and have faith that as this point we need to shake things up to get the public back into a future thinking preference.

News:

The rate of home mortgage borrowers defaulting after their loans are modified is rising and shows no signs of leveling off, U.S. banking regulators said on Monday.

The data showed that after six months, nearly 37 percent of mortgage loans modified in the first quarter were 60 or more days delinquent. After three months, 19 percent were 60 or more days delinquent or in the process of foreclosure.

“One very troubling point is that, whether measured using 30-day or 60-day delinquencies, re-default rates increased each month and showed no signs of leveling off after six months or even eight months,” John Dugan, head of the Office of the Comptroller of the Currency, said in a statement.

The number of delinquencies rose across all loan categories, although subprime loans had the highest default rates. At the same time, nine out of 10 mortgages remain current, the joint report by OCC and the Office of Thrift Supervision said.

Some U.S. lawmakers and the head of the Federal Deposit Insurance Corp have called for a more aggressive effort by lenders to modify mortgage terms to help keep people in their homes.

Source: Reuters

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