A real estate analyst is out with research that shows what he says is a major spike in “re-defaults” on mortgage modifications. They endanger the U.S. home and mortgage markets.
In an opinion piece posted at MarketWatch, analyst Keith Jurow says in the midst of the housing collapse more than a decade ago, mortgage modifications were rolled out to enable millions of delinquent homeowners to avoid having their home foreclosed.
Based on Office of the Comptroller of the Currency research, Jurow says 47.3 percent of these modified mortgages were still current at the end of the first quarter of 2013. The rest were either seriously delinquent, in the beginning of foreclosure proceedings, had already been foreclosed, or were no longer in the portfolio of the servicer. In its most recent report for the first quarter of 2019, the OCC noted that 21% of the most recently modified loans had re-defaulted within six months.
Jurow added, “Millions of U.S. homeowners have re-defaulted on their mortgage modification. Even worse, a steadily growing percentage of them have re-defaulted more than once. As home prices continue to weaken, many of these re-defaulters will see that continuing to pay their modified mortgage does not make much sense.”
Click on the image above to learn more about re-modifications and their economic impacts.