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Modified Loans Still Going Delinquent, Report Says

WASHINGTON -- Two federal agencies delivered a lump of coal to lenders earlier this week, releasing a third quarter report that says loan modifications aren't working for a significant percentage of borrowers.

By Heather Anderson | Updated on December 25, 2008

WASHINGTON — Two federal agencies delivered a lump of coal to lenders earlier this week, releasing a third quarter report that says loan modifications aren’t working for a significant percentage of borrowers.

For the first time, the report by the Office of the Comptroller of the Currency and the Office of Thrift Supervision tracked re-default rates on modified loans. Thirty-seven percent of 30-day past due loans modified in the first quarter were delinquent after three months, and 55% were delinquent after six months. The numbers were slightly better for loans 60 days past due at the time of modification: three months later, 19% were delinquent, with that number rising to 37% six months after modification.

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