Tag Archives: Redefault

The average mortgage loan in foreclosure has been delinquent for 599 days, according to Lender Processing Services (LPS). That's a record for the company's regular monthly study on mortgage performance trends. As of the end of July, LPS counted 2.2 million loans that were in foreclosure and nearly 1.9 million that were over 90 days past due but had not yet started the foreclosure process. The company also found that 38 percent of July's foreclosure starts were repeat foreclosures.

JPMorgan Chase kicked off the banking sector's second-quarter earnings season with a $5.4 billion profit. It was followed by Citigroup's announcement that it pulled in net income of $3.3 billion. Both beat market expectations, however, neither lender escaped mortgage-related losses - a trait that is likely to show up on balance sheets throughout the industry as banks continue to grapple with delinquencies and additional costs tied to foreclosure reviews and litigation.

Mortgage insurer PMI has announced the launch of a new program to identify mortgage servicers who score high marks for keeping borrowers in their homes. These companies will benefit from certain advantages when doing business with PMI. The company has identified certain servicing best practices that play a central role in maximizing home retention and achieving positive results for borrowers, communities, and mortgage investors, alike, and PMI says servicers who follow these practices should be recognized.

Both new foreclosure actions and completed foreclosure sales took a dive in April after rising sharply the month before, according to industry data released Wednesday. Foreclosure starts nationwide totaled approximately 163,000 in April, while foreclosure sales dropped to 73,000, reports the industry alliance HOPE NOW. At the same time, though, proprietary loan modifications also declined. HOPE NOW says the performance of these loan mods has remained ""steady,"" with a re-default rate of 20 percent.

Freddie Mac's economists see some positive signs for housing in terms of affordability and low mortgage rates, but extended unemployment dampens the forecast. The average duration of unemployment was just over 38 weeks in April. The GSE says the large number of workers unemployed for a long period remains the predominant force behind seriously delinquent mortgages. According to Freddie Mac, the economy needs to add over 250,000 new jobs per month, on a sustained basis, to reabsorb all the jobs lost since the recession.

Sixteen percent of homeowners receiving permanent assistance through the government's Home Affordable Modification Program (HAMP) have been disqualified from the program for missing three consecutive payments, according to Treasury. Federal officials say HAMP's permanent mods are performing well over time, with a better track record of sustainability than the industry's private modifications. There are currently 587,000 borrowers in a permanent HAMP modification.

With loan modifications on a steady decline, the analysts at Fitch Ratings say the common thread running through the industry has become when will the servicer foreclose as opposed to how can a distressed borrower stay in their home. Fitch's analysis of loan mod trends shows little improvement in success rates. While alternatives like short sales are modestly improving loss severities, the agency says servicers report borrowers are electing to remain in their property longer by staying on through the extended foreclosure process.

Moody's Investors Service studied two million loans backing residential mortgage-backed securities (RMBS) pools and 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 a current loan that has not been modified. The agency's also put the practices of eight major servicers under the microscope. It found that six-month re-default rates vary considerably, from 20 percent for Citi and Litton to 33 percent for Bank of America.

The Michigan State Housing Development Authority (MSHDA) has provided free foreclosure counseling assistance to more than 17,000 families through the National Foreclosure Mitigation Counseling (NFMC) program over the last two years. Created by Congress in January 2008 to address the nationwide foreclosure crisis by increasing the availability of free counseling for families at risk, the NFMC program has provided 1.12 million struggling homeowners with foreclosure prevention counseling across the nation.

New data from federal regulators show that the nation's largest banks and thrifts repossessed nearly 187,000 homes during the third quarter of 2010. The number of foreclosures completed during the three-month period is up 57.5 percent from a year earlier. The report shows that new foreclosures initiated also rose to more than 382,000. Although foreclosure activity increased during the quarter, servicers reported almost twice as many home retention actions as completed home forfeiture actions.