DISQUS

AMERICAblog: Half of mortgage modifications re-defaulting within 6 months

  • Older_Wiser · 11 months ago
    Not good news at all. Job losses might have contributed to some of those, I'd bet.

    Time to hunker down...
  • Bush_Bites · 11 months ago
    Guess I'm not too surprised.

    As O_W said, the economy has only gotten worse since then.

    Also, I suppose, there are still a lot of people in houses they really shouldn't be able to afford.

    I'd still push the banks to rework loans tho. If nothing else, it will create a softer landing as the real estate market hits bottom.

    I mean, the banks can't take over all this property at once anyway.
  • Older_Wiser · 11 months ago
    I wouldn't be surprised if some of those homes were purchased by bank employees...so, I expect some of them are getting hit twice: loss of job, loss of home. You'd be surprised at the foreclosures on some of the lake houses around here.
  • Jennifer · 11 months ago
    Dear God: Seeing as you managed to wire Anne Coulter's face shut, could you please make 16 tons drop out of the sky on Mr. Dubya? Thank you.
  • Bush Bites · 11 months ago
    LOL!
  • CDS2 · 11 months ago
    I don't know why anyone would be surprised, the folks defaulting would default at 0% interest. They should never have been given a loan at all.
  • Soundboy_jeff_meanie · 11 months ago
    wrong... the foreclosures aren't all subprime morgages, in fact they make up less than half the expected foreclosures.

    the economy sucks... almost no one (with the exception of medical professionals and lawyers) has any sort of job security.

    when you lose your job, there ISN'T another one waiting... unless you'll take anything to get by... which means a drastic reduction in pay, so how do you keep your house?

    you're outside of this whole fiasco by being retired.

    it isn't just people who couldn't have made payments because they bought something well beyond their means... unemployment is creeping toward %10.
  • ruthlessgravity · 11 months ago
    unemployment is at 6.7% Saying that its creeping towards 10% is highly dishonest. Can it go to 10? Yes. But we aren't close to being there yet. Remember, unemployment was around 4-5 percent prior to this starting. We have only had an uptick of 2% thus far.

    If people did proper financial planning, they would have a cash cushion to help them get by. Instead, we have a negative savings rate and those that didn't buy too much house probably had a home equity line and spent heavily on credit. The major economic problem is that we have a US population that is becoming less credit worthy by the day. You can work out the loan by cutting the interest or extending the term of payments, but these people are going to default anyway because they have poor credit worthiness to begin with. The best solution is to let them default so that we can get back to some basis of what tangible goods are really worth. If we keep propping up housing prices with stupid gimmick programs, we are never going to get to the bottom of this and it will continue to drag on.
  • CDS2 · 11 months ago
    All of us....R's and D's were applauding the fact that more people owned houses than at any other time in our history. What we didn't know was that banks were being fined for not giving low income folks loans. Wrong.
  • EdNSted · 11 months ago
    If you think this problem is bad, wait til you see the solution....

    http://market-ticker.denninger.net/archives/677...
  • EdNSted · 11 months ago
    ...and if this is even close to accurate, Obama will never see a second term, regardless of who runs against him.
  • EdNSted · 11 months ago
  • Happy_Housewife · 11 months ago
    I don't believe that the mortgage companies are really working with people. We had a neighbor who got behind on his payments. Instead of taking partial payments, the mortgage company (countrywide) told him he had to pay ALL or NOTHING. Then they told him he could enroll in a special program to help people who were behind. The paperwork for that finally arrived after he sold the house at a loss.

    Oh, and this was no subprime mortgage. He'd been in the house for ten years, was never late, and only got behind because he lost his job.
  • Older_Wiser · 11 months ago
    Sadly, I believe that is happening to a lot of people now that the job market is screwed so badly. My son has been in his house 12 yrs and works in commercial construction which is beginning to slow down; he's lucky he's not in home construction--so far he's lucky, that is.
  • CDS2 · 11 months ago
    My son is a plasterer in Wisconson. He's out of work.
  • Goober Peas · 11 months ago
    I don't know why anyone is surprised. Real wages have plummeted along with the rising cost of food, medicine, insurance, and utilities. Once you get into a hole it isn't easy to get out even with a few hundred dollar reduction in a mortgage payment, what with the fees and charges on credit cards and their usury-level interest rates.

    Until someone addressed the factors and wage and income disparities the economy isn't going anywhere. I am a public school teacher and we took a massive hit this year -- no puny 2% - 3% COL increase and a pay cut on top of that. The moneys formerly available for extra after-school and summer work dried up months ago.

    3 of my colleagues have filed bankruptcy recently due to spousal medical costs. Another is losing a house after her husband died. We are all working 3 jobs and still aren't able to make ends meet. All our expenses rose 10% - 20% and our wages haven't caught up with the increases for years. Yeah, you can be smug about it CDS2. I just hope you never have to go through a massive salary reduction/layoff, have an ill spouse or child after your insurance benefits are cut and your premiums raised, or have a car die or a major home repair. Some of us are just not smart enough I guess to live within our ever-shrinking means....
  • Soundboy_jeff_meanie · 11 months ago
    cds2 is retired... he doesn't get it.
  • CDS2 · 11 months ago
    Yes, retired without a pension plan. The crash has hurt me, but that still doesn't change the fact that too many low income people were given mortgages that they could not afford. Look to Barney Frank for someone that should be impeached !
  • Dino_V · 11 months ago
    Yes lets give more degenerates with no jobs mortgages so the people that have jobs can bail them out. That is just what I want. I am sure Barry has a plan to increase taxes on hard working Americans and give it to people that make $5.00 an hour that took out $400,000 mortgages because they did not have to document their income thanks to the democrats wanting to be "fair" and let everyone get loans, nice job.
  • Bush Bites · 11 months ago
    Yeah, like you have a job.
  • larry · 11 months ago
    do you suppose that maybe, just maybe, those folks got laid off? usually folks who would have needed the modification are would be the most vulnerable to lay offs......so not sure what the surprise might be. Over 2 million people in this country have lost jobs this year and before it is all done the reported unemployment rate will come in close to ten percent but the real rate of unemployment will be over 15%. Lots more mortgages problems lay ahead.
  • shak el · 11 months ago
    The only way out is to declare a good olde fashion biblical Jubalee! That is cancel all debts for everyone, free the captives, and redisribute the land (which today I envision to be: what ever home your living in is now yours and all excess homes to be given by lottery to the homeless.
  • alance · 11 months ago
    Half of the mortgage modifications don't re-default in six months. How do you wish to spin this statistic? Go ahead and blame the victim. The only kind of loan offered these people with shaky credit were high interest ARMs. The predatory sub-slime mortgage companies were just running a giant pyramid scam. Go ahead and blame the victims like Republican senator Bond from Missouri did on C-Span today. The victims are not going to vote for idiots who call them pond scum.
  • Ferdiad · 11 months ago
    this is what any person with a half a brain has been saying all along. It isn't a mortgage problem but an income problem. People don't have the income to afford their homes, the values aren't there and many of these people just don't have it in them to make the payments. As painful as it is, we must let it bottom out and start over.
  • Anon · 11 months ago
    The explanation for the trend is that it is entirely expected by those that modified the mortgages.

    They modify the mortgages by the minimum amount that they can. This almost guarantees that the mortgagee will continue to have problems unless the stars align favorably. The adjustments are made very conservatively so that the mortgagor doesn't give up anything more than they must.