Call us 619.435.0145


Modified Mortgage Show Alarming Default Trend

Posted by: kateg 4 years, 11 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, 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 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.


Latest News

December 20, 2017 Christmas at the Hotel Del Coronado September 25, 2017 Fall Home Maintenance Tips September 21, 2017 Things To Do This Weekend: Sept 22-24 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