Consumer Law

For Banks, Bigger is not Better

By Alan White

A new Moody's report finds that for all mortgage modifications since the crisis began, the redefault rate is nearly 50%.  On the other hand, they also find that homeowners with more recent modifications, and modifications that actually provide payment relief, do much better.  None of this is news, but Moody's also provides redefault rates broken down by servicer.  The rate of modification failure is directly related to the size of the bank servicing the mortgage:

• Bank of America ? 33%
• Wells Fargo ? 29%
• American Home Mortgage ? 26%
• Ocwen ? 24%
• GMAC Mortgage ? 23%
• JPMorgan Chase ? 22%
• CitiMortgage ? 20%
• Litton Loan Servicing ? 20%

Another bit of evidence suggesting that BofA should be relieved of the onerous job of servicing defaulted mortgages.

Full post as published by CL&P Blog on February 07, 2011 (boomark / email).