Seems that the people that defaulted on their mortgages, have defaulted again, even after all this aid that has been tossed around. So reports Reuters:
Recent data suggests that many borrowers who received help with mortgage modifications earlier this year tended to re-default on their payments, a top U.S. banking regulator said on Monday.
“The results, I confess, were somewhat surprising, and not in a good way,” said John Dugan, head of the U.S. Office of the Comptroller of the Currency, in prepared remarks for a U.S. housing forum.
“Put simply, it shows that over half of mortgage modifications seemed not to be working after six months,” he said.
Dugan said based on data collected from some of the biggest U.S. institutions, like Bank of America, Citibank and JPMorgan Chase, home foreclosure starts fell 2.6 percent in the three months ended in September.
However, data which is to be issued by the OCC and the Office of Thrift Supervision (OTS) next week could throw cold water on a push by some U.S. policymakers for loan modifications as the key remedy for the ailing U.S. financial and economic crisis.
Dugan said recent data showed that after three months, nearly 36 percent of borrowers who received restructured mortgages in the first quarter re-defaulted.
The rate of re-default jumped to about 53 percent after six months and 58 percent after eight months, Dugan said, without providing an explanation for the trend.
Regulators speaking at an OTS-housing forum did not provide any explanations for the causes behind the data.
“We don’t know the answers yet, but these are the types of questions that we have begun asking our servicers in detail,” Dugan said.
Sheila Bair, chairman of the Federal Deposit Insurance Corp, who has been pushing for fast and systematic loan modifications, said regulators need to examine re-default data more closely.
“I think it’s very important to look at this data carefully and know what it says and what it doesn’t say,” Bair said.
Dugan said the third-quarter report will show many of the same disturbing trends as other recent mortgage reports, as credit quality continued to decline across the board and delinquencies rose for subprime, alt-A and prime mortgages.
He said the report will also show that the greatest delinquencies were in prime mortgages.
I can tell you exactly what the answer is. You do not hand out mortgages to people that you know damned well that they cannot pay for them. That is the answer! This is why the Country, The Big Three and Wall Street are in the mess that they are in now, in the first place. Because fucking Bill Clinton and his team of morons decided to FORCE lending companies to gives loans to HIGH RISK persons, and they’re called that for a reason, they’re known not to pay their bills!
High Risk is called High Risk for a reason! Duh! Man, I could have told them that and I am a High School Drop out with A.D.H.D. 🙄
“Clue needed on Asle 5, Clue needed on Asle 5 Please.”
(Thanks Q & O)