Fifteen state officials blasted a federal report that said loan modifications had led to increased redefaults.
The members of the State Foreclosure Prevention Working Group said Monday that the report, issued by the Office of the Comptroller of the Currency and the Office of Thrift Supervision, lacked information about its methodology and whether loans were redefaulting because modifications were too timid.
"Without a more transparent and robust reporting, we are concerned that the statistics publicized by the OCC/OTS report are misleading and likely to lead policymakers and the public to develop misperceptions about the effectiveness of loan modification programs," the state officials wrote in a letter to Comptroller John Dugan and OTS Director John Reich.
The federal agencies' Mortgage Metrics Report, released in December, found that 55% of modified loans at thrifts and national banks were 30 days or more past due in the first six months.
But the state officials said nonbank subprime servicers in their working group had more success with modifications. Only 25.8% of loans modified by the 13 major servicers "were at any stage of delinquency," the group said. "We are concerned that either the institutions supervised by the OCC and OTS have thus far failed to offer homeowners sustainable loan modifications, … or that the data collection has some other limitation not identifiable by your current report."
Spokesmen for the federal agencies would not comment. "When we receive the letter, we'll review it and respond to the working group in due course," said an OCC spokesman.