Tuesday, December 9, 2008

Reworked Mortgages Aren't Working


Companies:Citigroup Inc | Bank of America Corp | JPMorgan Chase and Co
Reuters | 08 Dec 2008 | 01:22 PM ET
Text Size

Recent data suggests that many borrowers who received help with mortgage modifications earlier this year tended to re-default on their payments, a top U.S. banking regulator said on Monday.

"The results, I confess, were somewhat surprising, and not in a good way," said John Dugan, head of the U.S. Office of the Comptroller of the Currency, in prepared remarks for a U.S. housing forum.

"Put simply, it shows that over half of mortgage modifications seemed not to be working after six months," he said.

In reality, I don't find this that surprising. If someone needs to work their re work their mortgage, it tells us the person was probably in an unaffordable home to begin with.