Group Urges More Principal Reductions as Foreclosures Outpace Fixes

The increased use of loan modifications resulting in lower payments has created more “sustainable” mortgages, but foreclosures continue to outpace the number of reconfigured loans, according to a report this week by the State Foreclosure Prevention Working Group.

Dropout Rate Surging in Taxpayer-Funded Mortgage Fix Program

The Obama Administration’s mortgage modification program is seeing an increasing dropout rate, with 96,025 additional cancellations out of payment-reduction trials reported for July – that leaves about 52 percent of the 1.3 million targed borrowers in either trials or approved status.

Mortgage Delinquencies Still High at 6.67% in Q2: TransUnion

Mortgage delinquencies – borrowers 60 or more days past due – posted a 14.8 percent increase in the second quarter of 2010 compared to the same quarter last year, according to credit reporting bureau TransUnion. The national mortgage delinquency rate was 6.67 percent — a level marginally lower than the 6.77 percent rate reported for the first quarter of this year.

Foreclosures Up 9% in July; Filings Down From Last Year

U.S. bank repossessions in July increased on a year-over-year basis for the eighth straight month as overall foreclosure filings rose 4 percent compared to June, according to RealtyTrac’s latest monthly update. Foreclosure filings were down 10 percent compared to July of last year.

Obama: $3B More Will Help Jobless, ‘Hardest Hit’ from Foreclosure

The Obama Administration is pumping an additional $3 billion into efforts to help the unemployed or struggling homeowners avoid foreclosure in the nation’s hardest hit housing markets. In a new program, the U.S. Department of Housing and Urban Development (HUD) will use $1 billion for “bridge loans” of up to 24 months.

Report: 21.5% of U.S. Homeowners with ‘Underwater’ Mortgages

The percentage of U.S. homeowners in negative equity, or with “underwater” mortgages, slipped to 21.5 percent in the second quarter, down slightly from 23.3 percent in the first quarter and 23 percent a year ago, according to the real estate data site Zillow.com.

FHA to Offer ‘Short Refinance’ Option for Underwater Borrowers

The Federal Housing Administration will offer homeowners who owe more than their home is worth a new “short refinance” opportunity beginning Sept. 7, but there are several requirements that “underwater” borrowers must meet and lender participation is voluntary.

Report: 75% of Top Metro Areas See Higher Foreclosure Activity

In the first half of 2010, 75 percent of the nation’s top metropolitan areas reported increasing foreclosure activity compared to the same period last year – that’s 154 of the 206 metro regions with a population of 200,000 or more, according to RealtyTrac. Meanwhile, foreclosure activity decreased in nine of the 10 metro area’s with the highest foreclosure rates.

Watchdog Urges Mandatory Mortgage Principal Reductions

The watchdog appointed by lawmakers to oversee the effectiveness of the government’s bailout programs again urged the U.S. Treasury to make either discretionary or mandatory a program to rescue borrowers from foreclosure through mortgage principal reductions. Currently, the alternative program is voluntary, leaving the decision up to the mortgage servicer.

Foreclosure Rescues: Cancellations Outpacing Approvals in HAMP

The government’s foreclosure rescue program in June continued to have more borrowers cancel out of mortgage modification trials – 21 percent increase – than those approved for a “permanent” five-year reduced-payment plan – a 14 percent jump, according to the latest figures released today by U.S. Housing and Treasury officials.
The June report concedes that “cancellations continue to rise as servicers comply with Treasury” guidelines to determine whether homeowners in trials can be upgraded to permanent status.

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