Modified Mortgage Show Alarming Default Trend
Posted by: kateg 7 years, 2 months ago
Across the news lately, everyone has been talking about the improved real estate market being driven by a lack of inventory. There are multiple offers on most listings in San Diego.
However, an article released today on marketwatch.com, shows another emerging trend: Defaulting modified mortgages.
When the government bailed out the banks in the US, the banks were forced to do loan modifications in high default areas. The loan modification programs (known as loan mods) were designed many different ways, including principal reduction, reduced interest rates, and/or extended terms, with the goal of converting toxic loans to performing loans.
According to the marketwatch.com article, "The oldest permanent modifications made through the federal Home Affordable Modification Program, which launched in 2009, were re-defaulting at a rate of 46.1% as of March 31, according to the report from the special inspector general overseeing the Treasury Department’s efforts to shore up the U.S. financial system. HAMP’s permanent modifications from 2010 have re-default rates ranging from 28.9% to 37.6%."
Furthermore, the article goes on to say, "Looking at Treasury’s use of funds from the Troubled Asset Relief Program, which was designed to shore up the U.S. financial system, less than 2%, or about $7.3 billion, has been spent on homeowner-relief programs, such as HAMP, as of March 31. Meanwhile, Treasury has spent 75% of TARP funds on rescuing financial institutions, the report said."
The information is definitely alarming, and is increases the concern over whether the TARP funds helped the homeowners that it was supposed to help, or if it just rescued the banks.
To read the full article, visit Marketwatch.Share on Twitter Share on Facebook
San Diego Homes
- 8 Tips to Make Your Home Camera Ready for Selling
- FAQ Friday: Exciting New VA loan benefits!
- FAQ Friday: Can the Buyer back out?
- Restaurant Spotlight: Rosemary Trattoria - Authentic, Family Friendly Italian
- *SPECIAL DELIVERY* Santa Claus is Coming to Coronado!
- Blog (349)
- Buyer's Guide to Buying a Home (11)
- DIY Homeowners (55)
- FAQ Buyer (36)
- FAQ Property Management (7)
- FAQ Renters (7)
- FAQ Seller (33)
- FAQ Short Sale (6)
- Friday Favorites (4)
- Home Projects (59)
- Listings (132)
- Local Info (75)
- Market Matters (34)
- Open House (18)
- Rentals (18)
- Restaurant Spotlight (1)
- Staging (1)
- Things to do (77)
- Tips (5)
- Tips for Buyers (7)
- Tips for Homeowners (5)
- Tips for Renters (5)
- Tips for Sellers (5)
- Tips/FAQs (2)
FeedsRSS / Atom
Latest NewsJanuary 31, 2020 8 Tips to Make Your Home Camera Ready for Selling January 17, 2020 FAQ Friday: Exciting New VA loan benefits! January 10, 2020 FAQ Friday: Can the Buyer back out? READ MORE
Our initial experience with you, especially with your demonstrable expertise, knowledge, and willingness to both educate and work with us regarding the market and related considerations particular to Coronado, resulted in a gratifyingly helpful and positive experience for us.—Robert R. READ MORE