With all of the problems in the mortgage industry, a new study appears to show that being 60 days late on mortgage payments is not as big of a concern as it used to be.
The State Foreclosure Prevention Working Group released a study last month showing that as many as 60% of mortgage borrowers did not have their accounts forwarded to the mortgage lender's loss mitigation department after becoming 60 days or more late on their payments. That figure, while historically high, may be understandable in the current economic climate.
Many of the borrowers in the study had seriously delinquent accounts that lenders were not taking action on.
Part of the reason may be because there are so many foreclosures right now that banks are not as quick to put a borrower through foreclosure without giving them ample time to catch up on payments.
Since October 2007, there have been more than 2.3 million foreclosures and giving borrowers some extra time is often the only thing needed to help them get back on track.
Loan modifications are another option for troubled homeowners. In many cases, it provides the mortgage borrower with the opportunity to get lower mortgage rates.
According to the working group, mortgage borrowers who modified their home loans last year were about half as likely to have a seriously delinquent account six months following their modification than those troubled homeowners who modified their home loans in 2008.
This shows that homeowners are more likely to take their second chance more seriously than their first chance.
