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Servicers outpaced by foreclosures

July 28, 2009
Mortgage Lending
Research

Definitions and Notes

Video of Sonia

Press Release

In a hearing on "Current Trends in Foreclosure and What More Can Be Done to Prevent Them," CRL urged Congress to take several actions to address the flood of foreclosures and fix the broken mortgage market: Create the Consumer Financial Protection Agency; pass or encourage sensible lending rules in the future; ensure that current prevention efforts are as effective as possible; and lift the ban that now prohibits home loan modifications through the courts.

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Definitions and Notes (Back to Top)
- This chart focuses exclusively on "loan modifications"—i.e., foreclosure prevention efforts that involve changing the terms of a mortgage. Other forms of foreclosure prevention or loss mitigation are not represented in this data, including repayment plans, 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 but does not include 1) mortgages that were already in the process of foreclosure during the given quarter or (2) mortgages that entered the foreclosure process during that period.

- Earlier this year, both Fannie Mae and Freddie Mac lifted moratoria on foreclosures, as did a number of states. The significant increase in foreclosure starts shown in 2009Q1 may be, in part, a reflection of foreclosures that were initiated after being "on hold" during a moratorium.

- Although this chart does not distinguish among different types of loan modifications, the Office of the Comptroller of the Currency and the Office of Thrift Supervision reported that less than half of all loan modifications in 2008 and the first quarter of 2009 reduced the borrowers' monthly mortgage payment (http://occ.gov/ftp/release/2009-37a.pdf). Research indicates loan modifications that reduce monthly payments are most likely to be successful.