Industry NewsMortgage

Loan servicers treading water

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Three quarters of seriously delinquent subprime borrowers were not headed for any loss mitigation outcome other than foreclosure at the end of January, state banking regulators and attorneys general said in a report that analyzes the lending industry's loss mitigation efforts. In their second look at how often subprime loan servicers are able to engage in workouts, loan modifications, short sales and other loss mitigation techniques, the State Foreclosure Prevention Working Group found that the percentage of troubled borrowers diverted from the foreclosure process -- about 25 percent -- remained essentially unchanged from last fall. While the number of borrowers engaged in some sort of loss mitigation increased, the number of delinquent loans was also up, leaving the relative percentage of borrowers getting help at about the same level as in October, the Working Group said. The study, Analysis of Subprime Mortgage Servicing Performance, calls into question the lending i...