Mortgage Repairs Lag Far Behind Foreclosures
Last spring when Congress considered taking stronger measures to stop foreclosures, loan servicers said they could handle the problem themselves—but they’re not delivering. The latest Mortgage Bankers' figures show that one in seven loans are now past due, and the proportion of struggling homeowners continues to climb in spite of stepped-up loan modification efforts.
Lower payments make loan mods that last. The latest report by the Comptroller of the Currency and the Office of Thrift Supervision shows that homeowners are less likely to re-default on loan modifications that reduce their monthly payment.
The magnitude of foreclosures and associated costs are daunting; the numbers tell the story. Read Snapshot of a Foreclosure Crisis – 15 Fast Facts.
In a hearing on "Current Trends in Foreclosure and What More Can Be Done to Prevent Them," CRL urged Congress to help families facing foreclosure by ensuring that current prevention efforts are as effective as possible, and also by lifting the ban that now prohibits home loan modifications through the courts. To keep the current disaster from happening again: pass or encourage sensible lending rules in the future, and create a Consumer Financial Protection Agency as outlined in H.R. 3126.
MBA Report Shows “Bubble” of Serious Delinquencies Still Growing Despite Servicer Efforts (Press Release)
Definitions and Notes (Back to Top)
Foreclosure Prevention Efforts refer to repayment plans, trial loan modifications, and completed loan modifications. Other efforts to prevent foreclosure that do not allow homeowners to keep their home are not represented in this data, including property short sales, and deeds-in-lieu of foreclosure.
The 60+ days delinquent category includes mortgage loans that are 60 days or more past due, including loans that were already in the process of foreclosure during the given quarter.
Foreclosure Starts include mortgages that entered the foreclosure process for the first time during this period. The 60+ Days Delinquent and the Foreclosure Starts categories are mutually exclusive.
Repayment Plans establish a schedule for the borrower to catch up on any missed payments without changing the terms or amortization schedule of the loan.
Published: December 4, 2009
