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Old 03-26-2010, 04:51 PM   #1
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Join Date: Sep 2008
Location: Turtle Island
Posts: 2,776
Thumbs down Half of U.S. Home Loan Modifications Default Again

Posted by Michael Barry on 03/26/10 at

Half of U.S. Home Loan Modifications Default Again

By John Gittelsohn

March 25 (Bloomberg) -- More than half of U.S. borrowers who received loan modifications on delinquent mortgages defaulted again after nine months, according to a federal report.

The re-default rate of loans modified in the first quarter of 2009 was 51.5 percent by the end of the year, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in a joint report today. The figure, which measures payments at least 30 days late, climbed to 57.9 percent for changes made in the prior 12 months.

U.S. homeowners are struggling to make payments as depressed housing prices leave them owing more than their properties are worth. About 24 percent of properties with a mortgage were underwater in the fourth quarter, First American CoreLogic said last month. The median price of a U.S. home was $165,100 in February, down 28 percent from its peak in July 2006, according to the National Association of Realtors.

Modifications are "clearly not working well and it's not a surprise,"


Referencing the same article above.

Housing: Obama Still Has Not Grown Up

Friday, March 26. 2010
Posted by Karl Denninger in Housing

The misdirection and outright BS simply refuses to stop:

March 25 (Bloomberg) -- The Obama administration plans to announce programs to help homeowners avoid foreclosure, including subsidies for borrowers who owe more than their home is worth.
This sounds like homeowners will get some "free money" gifted to the banks so as to make them "not underwater" and thus avoid foreclosure. Well, it is - to a point. (If you were one of the people who put down 20% during the boom and was prudent in your use of debt, are you angry yet? You should be!)

The new plan would increase payments to lenders that modify second mortgages, an official said. Banks’ unwillingness to write down second liens has helped block efforts to prevent foreclosures, said Josh Rosner, managing director at Graham, Fisher & Co. The Washington Post reported earlier on the administration’s plan.
Banks aren't unwilling, they're unable. Look, this has been true since this crisis began - the banks - especially the big banks with lots of these loans - are insolvent if they recognize the "value" of this paper.
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