How’s That Smartest Evuh Mortgage Plan Going?
Oh, just about as well as you’d expect
March 25 (Bloomberg) — More than half of U.S. borrowers who received loan modifications on delinquent mortgages defaulted again after nine months, according to a federal report.
The re-default rate of loans modified in the first quarter of 2009 was 51.5 percent by the end of the year, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in a joint report today. The figure, which measures payments at least 30 days late, climbed to 57.9 percent for changes made in the prior 12 months.
Of course, given the results I guess it’s a good thing that the implementation has been so sucktastic
The expansion of President Obama’s signature $75 billion loan modification effort comes on the heels of two blistering government watchdog reports, which slammed the administration for poor implementation of the program, and raised doubts that it would reach the initial goal of helping 3 to 4 million troubled borrowers stay in their homes.
The program, which calls for reducing borrowers’ monthly payments to 31% of their pre-tax income, has led to only about 170,000 long-term modifications so far.
The low figure has prompted consumer advocates and industry experts to call the program — which focuses on adjusting interest rates and loan terms to bring monthly payments to affordable levels — a failure.
(though of course as you can see this has led to the standard “gee the problem isn’t our Super Plan itself but rather that WE DIDN’T GO FAR ENOUGH” response)
Gack.
Biz, Nanny State, Politics | Mr. Bingley | 
March 26, 2010 7:53 am
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In anticipation of their next “fix”*, I offer up the new term “re-re-default rate of loans”.
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*: Other than pulling their heads out of their a$$e$, I mean.
And you know, it worked so well for the housing and mortgage industry, let’s go ahead and do it for educational loans! And when that doesn’t work they’ll blame capitalism and claim they need more control over us to fix our obviously-bad behavior.
Now we have a new program to subsidize the banks in reducing the principle on underwater mortgages. Anybody else starting to feel like a chump for being conservative and making all your payments all of those years?
Even a CNBC columnist asks “And for those of us who acted responsibly? No pain no gain.”
I’ve been renting for nine years now. . . technically I haven’t ever paid my mortgage–does this mean I get a house?
I have some good news and some bad news Kate. The good news is that yes, Obama will give you a house. The bad news is that you have to wait for Jimmy Carter to build it.