Wednesday, July 01, 2009

Mortgage Redefaults

If you type mortgage modification into the Google news search engine, you currently receive six hundred and forty-five (645) possible news links to peruse.  Some, trumpet large numbers of mortgage modifications completed, while others warn of possible fraud, or the impossibility of having a mortgage modification completed due to “paper jams” or what not.

Tim Cavanaugh, at Hit & Run, notes that a very large percentage (any where between 46% and 64%) of these modified mortgages are ending right back where they started.  In default.

In general, the more loans you modify, the higher the percentage of redefaults: In the first quarter of 2008, 68,001 loans were modified, and 40,206, or 59 percent, of those have ended up 30 days late again, or worse. In the first quarter of 2009, 185,156 loan mods were done, and of those, 120,067, or 64 percent, ended up in trouble. (Check my math: to get a total-in-trouble number I’m adding up “30-59 days Delinquent,” “60 or More Days Delinquent,” “In Process of Foreclosure,” and “Completed Foreclosure.” To be sporting, I’m leaving “Short Sale or Deed-in-Lieu of Foreclosure” out.)

Cavanuagh’s post on this subject is titled Deadbeat: Not Just A Circumstance, A State of Mind and it provides links to all the pertinent data on this subject.

Everything’s going so well, isn’t it?

Posted by John Venlet on 07/01 at 10:48 AM
(0) Comments • (0) Trackbacks • Permalink
Page 1 of 1 pages