Foreclosure Rates Down
RealtyTrac reports a strong 7 percent drop in November foreclosure rates, but pause the rejoicing. There are lots of foreclosure abatement programs at work here. And there is emerging bad news on the loan modification front, OCC reports greater than a 50 percent redefault rate with six months.
Delinquencies on loans not yet in the foreclosure process jumped to nearly seven percent in the third quarter, a record high, according to the Mortgage Bankers Association, Saccacio said.
“And more than half of the homeowners who received loan modifications to reduce monthly mortgage payments in the first half of 2008 are already delinquent on their loans again, according to the US Office of Thrift Supervision.
“Many of these delinquencies could turn into foreclosures next year,” he warned.
FDIC wants more details on that data, questioning the quality of the loan modification programs–some purportedly increase a borrowers payment. This objection may hold water. OCC data shows that loan modifications that include an interest rate reduction only re-default at 17 percent.
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More information and resources on mortgage loan modification programs at MortgageLoan.com
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