Housing Bailout Programs Flop!
What programs there are–and there aren’t many–to bail out homeowners who are facing foreclosure are turning out to be total flops according to some new data reported by Reuters News Service.
Apparently, “the rate of re-default on modified mortgages is rising and may worsen as the economy deteriorates,” Reuters quotes banking regulators as saying.
The problem seems to be that most of the mortgage modifications till recently were just short term fixes and not geared toward longer term goals.
After 6 months, just about 37 percent of mortgage loans that had been modified or adjusted in some way in the first quarter were delinquent 60 days or more, Reuters quotes both the Office of the Comptroller of the Currency and the Office of Thrift Supervision as saying.
One way to look at this, of course, is to blame it totally on the lenders…one can argue they were playing games with homeowners and not really coming to their rescue. And, in many cases, that is probably true.
On the other hand, what the figures also suggest is that some homeowners have still not learned any lessons from their first brush with foreclosure and agreed to modified mortgages they still could not afford to ever pay!
Of course, for these souls, the government will likely double back and re-modify the already re-modified mortgages to keep them from foreclosure.
Where does this leave the majority of home owners who are paying their bills but are not being rewarded by the government but rather , in effect, punished for their timely payments?
Something wrong with this picture?
You bet there is!!!