Today, we have, so-to-speak, a doubleheader of sorts. Some of this is good news for borrowers, while, unfortunately, some is not. First, the good news.
Birminham, Alabama-based Regions Financial, a multi-state financial services firm of $144 Billion in assets, with offices in 16 states across the South, Midwest and Texas, announced that through its Customer Assistance Program (CAP) it has helped 103,000 of its borrowing clients avoid potential default and/or foreclosure. In use since 2007, the firm offers a wide variety of plans to assist customers in need, some on its own, and others in conjunction with HUD's H4H or through NeighborWorks and other third party organizations.
If you are a client of this organization, you should contact your local Regions office immediately if you are having trouble with your mortgage payments.
Now, the negative. In a news conference held in Washington on December 8, the Controller of the Currency, John Dugan, said that over half of all loans that were adjusted through Loan modification in the first quarter of 2008 have become delinquent again within six months after the modifications were made.
Using figures covering 2008, Dugan said that in the first three months after the loan mod was done, 38% of borrowers had redefaulted, while for loan mods done over six months ago, the rate of redefault was 53% and over eight months it was 58%--none of these being very encouraging figures.
No-one seems certain of the reasons. Items being looked at are poor quality of the moldifications done, transfer of the amount of payments saved by loan modifications to credit card or other debt, as well as a number of other possibilities.
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