Banks and government agencies are ramping up their efforts to save troubled home loans, but not fast enough to keep the wave of foreclosures from rising, according to a government housing report released Monday, the Christian Science Monitor reported yesterday. Mortgage problems rose during the third quarter, with 6.2 percent of all loans seriously delinquent (60days or more past due) and an additional 3.2 percent of all loans in the
process of foreclosure.
Delinquency among prime mortgages – the largest and highest-quality category – rose significantly. Banks and mortgage servicers expanded their efforts to save troubled mortgages by modifying the loans, especially through trial programs subsidized by the federal Home Affordable
Modification Program (HAMP). For every six home-loan borrowers who were seriously delinquent or in foreclosure, about one borrower received a permanent or trial loan modification. Borrowers with modified loans show a high rate of re-default.
More than half of all modified loans have re-defaulted within six months of the change. But the most recent modifications, ones made during the second quarter, show a lower initial rate of re-default than modifications done in prior quarters. The survey, issued by the Office of the Comptroller of the Currency and the Office of Thrift Supervision, sends a sobering signal, even though other trends in the U.S. housing market have been more positive in recent months. The poor performance of existing loans, however, suggests that the housing market will continue to have a large inventory of distressed properties for sale in the year ahead, including both sales of bank-owned properties and lender-approved “short sales.” The real estate firm First American CoreLogic estimates that nearly 1 in 4 home loans nationwide is “under water,” with a
balance larger than what the house could currently sell for.
Click here to read the full article <http://dizzy.abiworld.org/t/1256476/11693/4691/0/> .
Leave a Reply