Loan modifications not a silver bullet for delinquent homeowners
Monday, April 6th, 2009 | Link | Spread The Word!
Homeowners are increasingly falling into delinquency in spite of programs implemented by mortgage lenders intended to prevent further foreclosures.
The report, by the Office of Thrift Supervision and the Office of the Comptroller of the Currency, which regulate mortgage lenders, has shown that in spite of a massive effort on the part of the government and Lenders, it has not been possible to draw a line in the sand and prevent further foreclosures. Moreover, decreasing labor markets are expected to exert upward pressure on foreclosure rates.
The financial services industry has been increasingly focused on Loan Modification, trying to find ways to keep homeowners in their homes. The modifications however have been subject to a re-default rate as high as 58%.
There have been increases in delinquency in prime mortgage holders, which have been considered low risk historically. Also on the rise are mortgages where the borrower is delinquent before making a single payment on the loan. Fraud is considered a possible cause in these cases of delinquency.