New Data: Housing Crisis Gets Worse; Many Modified Mortgages Still Delinquent!


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!!!

About Author

Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog, as well as on The Huffington Post.


  1. We have been in the Real Estate business for 30 years and would like to offer our idea for a solution, or at least an idea, to ease the housing crisis.

    Step #1: Give everyone who has a mortgage a 120 day moratorium on their mortgage payments. This would be retroactive for anyone who is currently late on their payment. This would act as a great stimulus to the economy, especially at Christmas time when people are motivated to spend money!

    Step #2: Individuals apply for Gov payoff and refinance into a 30 yr. fixed rate of 3% – 4%. Applicant shows decrease or loss of income. Gov will payoff the loan, same as any home owner could do at anytime they were able, and the Gov will hold the deed to these homes so will have something if the home owner still goes into default. If a home owner is still unable afford the payment, work a Gov Subsidized loan with them and keep them in their home, same as the Gov does with Gov subsidized housing projects across the country, only difference is that the Gov will own these homes, not the developers who build Gov subsidized housing projects.

    This process could be run through the mortgage lenders, and anyone associated with this process would provide a huge shot in the arm for them and should create additional jobs at the same time.

    In short, if the banks don’t want to loan money to help jump start the economy, it’s time for the Gov to step in and do it for them!

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