Latest Posts
Home > Debt Articles > Mortgage Modification Re-Default Rates Are Horrible

Mortgage Modification Re-Default Rates Are Horrible

Based on new data out it looks as if the people who were actually able to obtain a mortgage modification are still in serious financial trouble.

Moody’s released new data that showed the modified loans have not resulted in default avoidance.

“We have found that a loan that is modified and [then] reported as current is three times as likely to default over the ensuing twelve months as is a current loan that has not been modified,” Moody’s said in a report issued Friday.

“Examining the performance of loans modified in 2009 and the first half of 2010 across major servicers, we found that six-month re-default rates vary considerably, from 20 percent for Citi and Litton to 33 percent for Bank of America,” Moody’s said.

Moody’s calculated six-month re-default rates on approximately 78,000 loans that were modified between the beginning of 2009 and mid-2010 by eight major servicers. The breakdown of each company’s modification re-default rate:

  • Bank of America – 33%
  • Wells Fargo – 29%
  • American Home Mortgage – 26%
  • Ocwen – 24%
  • GMAC Mortgage – 23%
  • JPMorgan Chase – 22%
  • CitiMortgage – 20%
  • Litton Loan Servicing – 20%

You can read more here.

Mortgage Modification Re Default Rates Are Horrible
Get Out of Debt Guy – Twitter, G+, Facebook

Mortgage Modification Re-Default Rates Are Horrible by

Share This and Spread the Word

About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Andy Faria

    The problem is that modifications don’t address the actual problem, the value of the home. All they are doing is lowering the interest rate and adding the arrears (principal & interest) into the loan, now as principal.

    Even a great modified interest rate of 2% still leaves the borrower handcuffed to the home until the value comes up. The modification simply acts as a temporary band-aid and redefault rates will continue to grow unless they start addressing the principal.

  • http://northeast-properties.com Andy Faria

    The problem is that modifications don’t address the actual problem, the value of the home. All they are doing is lowering the interest rate and adding the arrears (principal & interest) into the loan, now as principal.

    Even a great modified interest rate of 2% still leaves the borrower handcuffed to the home until the value comes up. The modification simply acts as a temporary band-aid and redefault rates will continue to grow unless they start addressing the principal.

Get My FREE Get Out of Debt Guy Newsletter

It is the smart thing to do.

I promise to keep your email safe and secure.

Close

I want to keep you posted each weekday with just one email about the latest get out of debt news, scam alerts and information to beat back debt.

You can unsubscribe at any time with just one click.

After you subscribe, check your email to confirm your subscription. If the confirmation email does not appear in your inbox in a few minutes, check your spam folder for it. Sometimes it likes to annoyingly hide there.


  • It will keep you posted on the latest scams.
  • You will be alerted to the latest articles.
  • You will wind up smarter than everyone else dealing with debt.