-“To avoid or at least delay losses, many lenders are trying to avert foreclosures by easing loan terms or giving struggling borrowers more time to catch up. Hope Now, an alliance of mortgage companies and investors, said last week that mortgage companies completed loan workouts for 183,000 households in April, up from 160,000 in March.”
So, what is really going on is that the banks cant modify morgages AND sell their reo fast enough.
Lets be honest, people wouldnt be defaulting if they could afford their morgages without special teaser rates and Neg Am’s. Just giving someone another year to pay something they cant afford anyways wont change the underlying issue that people cant afford their homes. Hope Now is a delay tactic. We’ll see how many of those 183000 workouts actually result in the avoidance of foreclosure. My guess is less than 25% (those are the people who got sick, divorced, or laid off and actually can afford it given alittle time) will be saved, and the other 75% will be 2009 REO instead of 2008.
Even Moody’s recognizes this, saying REO wont PEAK till late 2009, 18 months away.
