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 by Steve Rhode