Loan Modification increase during First Quarter
July 4th, 2009 | by ratefix |
Loan Modification has increased in the first quarter, according to a government report, but borrowers are still falling behind on mortage payments.
Comptroller of the Currency and the Office of Thrift Supervision released the report finding that loan modifications jumped 55% from the previous quarter and 172% from a year ago.
Borrowers in trouble are seeing payments reduced thanks to a loan modification by having their interest rate lowered or the terms of their mortgage loan extended. Although, only 1.8% of the loan modifications included a reduction of principal.
The participation in the loan modification program is encouraging but the percentage of late or non-payments is increasing too. It is up 163.7% from a year ago. Subprime payments are also experincing mass delinquencies, up 54.9% from a year ago.
The Obama administration’s foreclosure prevention program may be helping but not enough to stop all of the leaks, clearly.