Lies, Damned Lies, and Loan Modification Statistics
In another answer to “How successful are loan modifications?” First Federal of California reported its loan modification statistics. According to Housing Wire, “The national average for a 30-day delinquency rate on modified loans is 63.3%, whereas First Federal is 29.8% on loans adjusted in the Q108.”
What does this mean? Well, it supposedly means that First Federal is doing a “better job” with its loan modification program than the mortgage industry average.
However, this is not an apples-to-apples comparison. The vast majority of the loan modifications in the national average are homeowners who are already behind on their mortgage payments.
The article states: “We contacted borrowers before they were delinquent,” explains Babette Heimbuch.
Publishing statistics on loan modifications that were done for borrowers who were current on their loans- not behind on their payments- and trying to position yourself favorably by comparing them to the national statistics that include ALL borrowers- is laughable.
Nevertheless, the industry as a whole is not doing enough to ensure the long-term sustainability of loan modifications. And, as I’ve mentioned in other posts, they can’t.
You can leave your fate to “chance,” and you know how bad the odds are, or you can get someone involved to help you to slant the playing field in your favor. Fortunately, you get to choose.
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Tags: First Federal, Loan Modification