Mortgage Lenders Trying to Help

A new study compiled by the State Foreclosure Prevention Working Group found the mortgage companies have been stepping up their efforts to work with delinquent borrowers, but their actions simply aren’t keeping up with the rapid rise in bad loans. Mortgage servicing companies were looking to modify around 45% of the loans outstanding while it expects less than 7% of the troubled borrowers to come up with the funds to make the loan current.

The study also found that most borrowers (75%) who were more than 60 days past due as of October 31st weren’t involved in any type of effort to work out their loan problems. This is a major problem given that mortgage servicing companies now have nearly 100,000 foreclosed properties on their books as of October 31st. They are trying hard to make good, but there is nothing they can do if customers continue to ignore their bills.

The mortgage industry itself is also trying hard by announcing a plan to freeze rates for certain subprime borrowers who face resets and establishing a toll free hotline that homeowners can call. Unfortunately, resets aren’t the only problem facing these people. For people holding subprime or Alt-A ARMs, 365,000 of the 1.1 million delinquent loans are 30 days past due even though the haven’t even seen their first rate reset.

Clearly, problems remain that need to be fixed and it is becoming increasingly difficult for mortgage lenders to take action when consumers aren’t coming forward. They appear to be doing as much as they can to help the situation…

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