February 7, 2008
Borrowers Finding Ways Out Of Subprime Mess
By Matthew L. Brown
The State Foreclosure Prevention Working Group has found that seven out of 10 delinquent mortgages are not on track for any "loss mitigation option."
The group is a partnership of 37 states led by the Conference of State Bank Supervisors . Massachusetts is on the group's executive committee.
In addition to finding "a large gap between the number of homeowners needing loss mitigation and the number receiving assistance," the group found most mortgage service organizations are giving homeowners "home retention options."
However, "payment resets," the spike in the amount due on adjustable rate mortgages, hasn't been a major factor in the year's tide of foreclosures. The group found that homeowners facing foreclosure on adjustable rate mortgages were in trouble before being hit with the dreaded "balloon payment." The group said that indicates fraud or weak underwriting on the part of lenders.
The group also found that homeowners are helping themselves out of foreclosures by catching up on back payments, and that the ability to "serially refinance" has all but dried up.
The group's report was released this week by state Attorney General Martha Coakley's office.
The group is a partnership of 37 states led by the Conference of State Bank Supervisors . Massachusetts is on the group's executive committee.
In addition to finding "a large gap between the number of homeowners needing loss mitigation and the number receiving assistance," the group found most mortgage service organizations are giving homeowners "home retention options."
However, "payment resets," the spike in the amount due on adjustable rate mortgages, hasn't been a major factor in the year's tide of foreclosures. The group found that homeowners facing foreclosure on adjustable rate mortgages were in trouble before being hit with the dreaded "balloon payment." The group said that indicates fraud or weak underwriting on the part of lenders.
The group also found that homeowners are helping themselves out of foreclosures by catching up on back payments, and that the ability to "serially refinance" has all but dried up.
The group's report was released this week by state Attorney General Martha Coakley's office.
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