Progress in loan modifications
Finally, some relief.
A report by two federal agencies confirms what I've been hearing recently - that more families are successfully modifying mortgage loans. And they are getting principal and interest payments reduced.
The Office of the Comptroller of the Currency and Office of Thrift Supervision reported that more than 78% off all new loan modifications in the second quarter of 2009 reduced the principal.
That was up from 54% in the previous quarter. In addition, the number of loan-modification efforts climbed 21.7% from the January through March period.
That's good news because the overwhelming majority of earlier modifications either did not change monthly payments or increased them. By reducing payments, banks lower the risk of a borrower defaulting on the modified loan.
"This trend represents a significant shift from earlier quarters," the report concluded.
But another trend was scary: The percentage of seriously-delinquent prime loans increased 10.5% from the previous quarter and the percentage of delinquent Alt-A loans climbed 11.1%.
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And 15.2% of payment option ARM loans were seriously delinquent, compared with 5.3%, and 10% were in foreclosure, triple the rate of all mortgages.
Completed foreclosures rose almost 17% from the previous quarter as moratoriums ended, but more banks were willing to cut a deal before that point: short sales increased almost 35%. In a short sale, a bank negotiate a deal with the owner before the house goes to foreclosure.
The report covers nearly 34 million loans totaling nearly $6 trillion in principal balances
Comments:
i have yet to hear of a family who is about to loose their home obtain any kind of help. we are told talk to your lender, answer the phone, do not ignore your mail, for what. just to be told you do not qualify. i just do not understand all the billons that were suppose to have been available for those at risk of loosing their homes. I have heard of pleaty of families with two-incomes obtain the modifications. But what about those who really need to have their loans modified?
Posted by: Linda trujillo at October 9, 2009 9:16 AM
Linda:
I totally understand where you coming from. In fact, the Congressional Oversight Panel criticized the president's mortgage relief program, saying it isn't helping enough people.
Still, local non-profits that work with homeowners say they are getting more successful outcomes, but it is still problematic for many families, especially those severely underwater or with lower incomes.
I would suggest contacting a group that works with homeowners, perhaps Clearpoint Credit Counseling Solutions in Fresno.
I wish you luck.
Posted by: Sandy Nax at October 9, 2009 9:30 AM
I have to say that our family have been successful in obtaining a Modification on both our first and second Mortgages. We tried on our own for 6 months to work with our Nortgage company with no luck at all! We had to hire an outside Mortgage Modification company to intervene on our behalf. It was scary to say the least because of all the scams we were hearing about Modification companies taking your money and running. However, we found a reputable company to work with that did take 1% from us up front fees to be our representative. It was well worth the money $4200.00 to be exact to have them do the leg work. It ended up taking us 8 months to finalize the process but after all was said and done we got both our first and second mortgage principals dropped significantly as well as our monthly payments reduced for a monthly savings of over $800.00. My advice to people don't give up trying to go through your Mortgage Company first because in the end you will reap the benefits.
Posted by: BEN at October 9, 2009 12:17 PM
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