According to the Thrift Supervision National Housing Forum that was held on December 8, the re-default rate of modified loans (which represent about 60% of all the loans), loans modified in the first quarter of this year after 3 months only nearly 36% of them defaulted again by being past 30 days late; after 6 months the re-default rate is 53% and after 8 months, it’s 58%. For the second quarter, the re-default rates are about the same. More than half of the modified loans are defaulting again, I believe it is an indication that loan modification is not working. Whether it’s due to the lack of principle reduction or simply economy in crisis, we wouldn’t be able to determine. Most likely, all of the above.
Source: CNBC.com
http://www.cnbc.com/id/15840232?video=955168734
Wednesday, December 10, 2008
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