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Life and Times of an itinerant slacker in Sacramento. Thrills, Spills Galore coming soon. Not to mention lots of opinions.

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Wednesday, December 10, 2008

Never Fear, the Guvmint’s Here

As we all await some new Federal action to modify more troubled mortgages, let’s look at the mortgages that have already been modified. The Comptroller of the currency has already taken that look for us, and it lookses nasty, precious. About one half of the modified loans are going bad by 6months. It hurts us,precious,ti hurts us!

Here’s the comptroller’s spin:

‘Comptroller Dugan Highlights Re-default Rates on Modified Loans
WASHINGTON — Comptroller of the Currency John C. Dugan said today that new data shows that more than half of loans modified in the first quarter of 2008 fell delinquent within six months.
“After three months, nearly 36 percent of the borrowers had re-defaulted by being more than 30 days past due. After six months, the rate was nearly 53 percent, and after eight months, 58 percent,” the Comptroller said in remarks at the Office of Thrift Supervision’s National Housing Forum today.
Mr. Dugan spoke during a panel discussion with OTS Director John Reich, Federal Reserve Board Vice Chairman Donald Kohn, FDIC Chairman Sheila Bair, and Federal Housing Finance Agency Director James Lockhart.
A key question, Mr. Dugan said, is why is the number of re-defaults so high? Is it because the modifications did not reduce monthly payments enough to be truly affordable to the borrowers? Is it because consumers replaced lower mortgage payments with increased credit card debt? Is it because the mortgages were so badly underwritten that the borrowers simply could not afford them, even with reduced monthly payments? Or is it a combination of these and other factors? ‘
Since even the Comptroller claims to not understand what this means, I can admit with a clear conscience that I am flummoxed, too. However, it could be that the modified loans are underwritten equally as well as the original loans? Tricksy banksers!

The Comptrol dude issued this cool graph. I imagine if googles searches ‘graphic sucking’ this is what they might see.You can click on the image to make it big enough to read.

That's my story and I'm sticking ot it.

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I must enjoy shouting into a vacuum, but I think about getting my act together one of these days. My mom says I am very handsome and intelligent.

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