Mortgage Lenders Slow to Respond
January 31, 2008
By now, most people are aware of the massive level of foreclosures taking place across the US. Many financial experts agree that the problem is likely to only get worse during 2008 and perhaps beyond. What is surprising to many of these same experts is the slow pace of assistance that lenders are offering those who are facing foreclosure.
According to a recent study conducted by the Mortgage Bankers Association, homeowners facing foreclosure procedures were almost twice as likely to find themselves losing the home as they were in finding themselves able to work something out with the lender.
The same report goes on to provide some insight as to what happened during the third quarter of last year. This particular quarter had a national foreclosure rate of 1.69 percent on outstanding loans and was the historical high to date. Since then the mortgage lending industry has decided to go along with a Bush plan that would freeze the interest rates for some 600,000 adjustable rate homeowner loans. The plan is not without its critics who say that it does not go far enough in helping those who face higher interest rate resets in the near future.
Sheila C. Bair who chairperson of the Federal Deposit Insurance Corporation (FDIC) recently said: “We must see a pickup in the pace, and the sooner the better.” Her remarks were in relation to comments that mortgage lenders are not helping high risk borrowers fast enough to make a difference.
Other information that came out of the Mortgage Bankers Association report included details that nearly sixty-two percent of borrowers who were delinquent during the third quarter of last year were brought into foreclosure proceedings. Those who did receive help from lenders received some form of repayment plan rather than a reduction in interest rates.