Loan modifications are a popular option most homeowners turn to when they are struggling with mortgage payments. It isn’t a secret however that it hasn’t worked as well as we hoped. The idea of “modifying” your current loan to create a more affordable payment plan seems enticing but do these popular loan modification programs actually work? Let’s looks at the data.
Don’t get me wrong, loan modifications do work for certain homeowners. Statistically, it is not for the majority. Mortgage Metrics Report reveals only 47.7 percent of the estimated 2.9 million loan mods are current or paid in full since 2008.
*excerpt from dsnews.com
“About 7.1 percent are currently less than 60 days delinquent; 14.2 percent are 60 or more days delinquent; 7.7 percent are in the foreclosure process. Lastly, 7.3 percent have already been foreclosed.
The OCC reports higher success rates among particular types of modifications. For example, the agency finds greater success among HAMP modifications. However, the OCC notes, “more restrictive qualification criteria restrict the number of borrowers who may qualify for a HAMP modification.”
Do you know of any friends or family who is successfully using a loan modification? What have you heard?
Peter
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