Reuters is reporting here that more than 50 percent of the people who defaulted on their mortgages and got mortgage adjustments have re-defaulted.
Dugan [head of the U.S. Office of the Comptroller of the Currency] said recent data showed that after three months, nearly 36
percent of borrowers who received restructured mortgages in the first
quarter re-defaulted.
The rate of re-default jumped to about 53 percent after six months
and 58 percent after eight months, Dugan said, without providing an
explanation for the trend.
Regulators speaking at an OTS-housing forum [Office of Thrift Supervision] did not provide any explanations for the causes behind the data.
“We don’t know the answers yet, but these are the types of questions
that we have begun asking our servicers in detail,” Dugan said.
Sheila Bair, chairman of the Federal Deposit Insurance Corp, who has
been pushing for fast and systematic loan modifications, said
regulators need to examine re-default data more closely.
“I think it’s very important to look at this data carefully and know what it says and what it doesn’t say,” Bair said.
Dugan said the third-quarter report will show many of the same
disturbing trends as other recent mortgage reports, as credit quality
continued to decline across the board and delinquencies rose for
subprime, alt-A and prime mortgages.
He said the report will also show that the greatest delinquencies were in prime mortgages. [emphasis added]
