Industry NewsMortgage

Loan mods don’t halt defaults

OCC: more than half re-default in six months
Published on Dec 8, 2008

Nearly six out of 10 troubled borrowers who were able to negotiate loan modifications during the first quarter re-defaulted after eight months, Comptroller of the Currency John C. Dugan said today.Offering a "sneak preview" of a quarterly report to be released next week tracking the performance of 35 million loans, Dugan said lenders nearly doubled the number of mortgage modifications between the first quarter and third quarter, and that foreclosures starts decreased by 2.6 percent during the third quarter.He called the poor performance of loans that were modified "somewhat surprising, and not in a good way."After three months, nearly 36 percent of the borrowers had re-defaulted and were more than 30 days past due. After six months, the rate was nearly 53 percent, and after eight months, 58 percent. The data was similar for mortgages modified in the second quarter, with 39 percent re-defaulting after three months and 51 percent after six months.In the past, lenders ...

Comments