Borrowers defaulting even after Loan Modifications
As we are all in unfamiliar territory, and this is one of the first reports to come out about stats invloving Loan modification. A bit of bad news for Banks and maybe for the FDIC as more data becomes more available. The Government might drag there feet even more about helping homeowners with the bailout money.
“More than half of delinquent homeowners whose mortgages were modified earlier this year ended up redefaulting within six months, a top bank regulator said Monday.
Some 53% of borrowers with loans modified in the first three months of 2008 and 51% of those with loans modified in the second quarter could not keep up with payments within six months, according to U.S. Comptroller John Dugan, who spoke at a housing conference.
The report, which will be released in full next week, covers nearly 35 million loans worth a total of $6 trillion — or 60% of all primary mortgages in the United States.
The high redefault rate raises concerns about the long-term effectiveness of loan modifications, which many are pushing as a key solution to the nation’s financial crisis.” according to Money.cnn.com
