I’m glad to hear some people are benefitting from modifications. I do think 40 year loans are tough, IMO. I just see that as mortgage slavery. But I read this and everything else I read just continues to make me think that modifications are not very successful.
Borrowers exit troubled Obama mortgage program More than a third of the 1.24 million borrowers who have enrolled in the $75 billion mortgage modification program have dropped out. That exceeds the number of people who have managed to have their loan payments reduced to help them keep their homes.
Last month alone,155,000 borrowers left the program — bringing the total to 436,000 who have dropped out since it began in March 2009.
But analysts expect the majority will still wind up in foreclosure and that could slow the broader economic recovery.
As more people leave the program, a new wave of foreclosures could occur. If that happens, it could weaken the housing market and hold back the broader economic recovery.
Even after their loans are modified, many borrowers are simply stuck with too much debt — from car loans to home equity loans to credit cards.
“The majority of these modifications aren’t going to be successful,” said Wayne Yamano, vice president of John Burns Real Estate Consulting, a research firm in Irvine, Calif. “Even after the permanent modification, you’re still looking at a very high debt burden.”
Credit ratings agency Fitch Ratings projects that about two-thirds of borrowers with permanent modifications under the Obama plan will default again within a year after getting their loans modified.
