Sixteen lenders, as well as 2,300 participants with Fannie Mae- and Freddie Mac-insured loans, started modifications for less than the national average of 12% of eligible loans, while only eight lenders modified more than 12% of their eligible loans. Last month, thirteen lenders modified fewer loans than the national average, while seven lenders modified more loans than the national average.
Here at Woodstock Institute, we’re tracking the mortgage lenders active in the Chicago area to see how they’re performing on their commitment to reducing monthly payments for distressed homeowners. Check back here every month to see who’s getting better—or worse.
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Hi Mike-- those are interesting points, but not entirely applicable to the types of modifications happening under the Making Home Affordable program. Many of the modifications made prior to HAMP ended up keeping monthly payments the same or actually raising them. HAMP modifications, however, place a special emphasis on affordability and keeping monthly payments under 31% of the borrower's income. This means that borrowers will be less likely to re-default. For more on that, see here: http://www.woodstockinst.org/b...rger-point—and-some-evidence,-too/
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One would think that if modifying a mortgage is less costly that foreclosure then it would benefit both parties (Mortgage holder & Borrower) to engage in this process. The problem is that more than half of these renegoiations fail, with the loan going back into default. In a rising housing market that wouldn't necessarily be a bad thing, but in a decreasing housing market foreclosing on a property later often results in the mortgage holder taking a bigger loss.
Another factor is that often times the reasons causing the need to renegotiate cure themselves within 18 months or less. Thus, a mortgage holder that renegotiates for a lower interest rate are losing money unnecessarily.
Homeowners receiving Illinois Hardest Hi... I received a Loan Modification from my lender, probably due to filing with Illinois Hardest Hit. I am attempting to see how well others have faired. ...
Data underscore need for principal reduc... 1. Servicers, not investors, make the decisions to modify, foreclose, or not, with little regulation, oversite, or accountability.
2. Servicers get ...
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