Foreclosure Is Still On Despite Efforts of the Mortgage Service Providers
Wednesday, January 7th, 2009
Despite strong efforts made by the mortgage service providers to assist the borrowers to keep back their real estate, the rate of foreclosure did not stop increasing in the third quarter. The condition of the economy is really bad and more number of people defaulted on their loan payments. The new foreclosures boiled down from June end to September end by 2.6 percent to 281,298 due to reasons like extended loan terms, low rate of interest, and state moratoriums on foreclosures. Still the rate of foreclosures in the third quarter went up by 8 percent to 127,738. The number of foreclosures that were under way went up by 11 percent to 617,642.
This increasing rate of foreclosure has taken place as many borrowers have failed to pay back their money. This includes also those who have drawn advantages from loan modifications. Over half of the loans that were modified in the first quarter have gone into delinquency after a period of six months. This by the end of September was due by over 30 days. One out of every five loans modified, was due by over 60 days after a period of three months, and 37 percent of them were 60 days delinquent even after six months.
Steve Bartlett, one of the members of Hope Now, said “Mortgage modifications work for people with incomes; it doesn’t work for people without income,” A report that has been collected from five thrifts and nine national banks shows that there are over 60 percent mortgages outstanding in US. It also shows that the quality of credit has gone down badly in all categories right from prime to Alt-A to sub-prime in the third quarter. The share of performing and current loans has dropped down to 91.47 percent by the close of the third quarter. This at the close of the second quarter stood at 93.33 percent.
According to economist Thomas Lawler a majority of the foreclosure reduction that took place during the quarter was mainly due to the state laws especially in case of California. It helped in delaying the process of foreclosure. Bartlett said that the real estate industry needs help from the federal government. In Bartlett’s own words, “If the federal government puts more money into mortgage modifications, we’ll have more mortgage modifications,” This plan is getting some force from the Chairman of the Federal Deposit Insurance Corp., Sheila Bair. This has however faced an opposition from the White House.
Search Foreclosure Listings
- California Foreclosed Homes
- Los Angeles Foreclosed Homes
- Pasadena Foreclosed Homes
- San Diego Foreclosed Homes
- San Francisco Foreclosed Homes
- More Foreclosure Listings
Related Foreclosure News
Popularity: 1% [?]











