New Overdue Home Loans Swamp Effort to Fix Mortgages in Default

[marmar]

from Bloomberg:



New Overdue Home Loans Swamp Effort to Fix Mortgages in Default

By Josh P. Hamilton and Bob Ivry

May 30 (Bloomberg) -- Newly delinquent mortgage borrowers outnumbered people who caught up on their overdue payments by two to one last month, a sign that nationwide efforts to help homeowners avoid default may be failing.

In April, 73,880 homeowners with privately insured mortgages fell more than 60 days late on payments, compared with 39,584 who got back on track, a report today from the Washington-based Mortgage Insurance Companies of America said. Mortgage insurers pay lenders when homeowners default and foreclosures fail to cover costs.

Foreclosure filings surged 65 percent and bank seizures more than doubled in April compared with a year earlier as rates on adjustable mortgages increased, according to RealtyTrac Inc. Lawmakers and Federal Reserve officials are trying to ease the worst U.S. housing slump since the Great Depression through tax rebates, expanded federal mortgage insurance and other programs.

``It's going to take a while before you see the impact of the government's plans, if you can even see a discernable one,'' said Steve Stelmach, an insurance analyst at Friedman, Billings, Ramsey Group Inc. in Arlington, Virginia, in an interview before today's report was released.

A lending industry-led program, backed by the U.S. Treasury Department, that encourages lenders to ease mortgage terms voluntarily has so far proven insufficient, Sandra Braunstein, the head of consumer and community affairs at the Fed, told the Conference of State Bank Supervisors at a meeting in Florida last week.

The mortgage crisis ``is bad and it's getting worse,'' Braunstein said, repeating the central bank's plea for lenders to consider forgiving portions of mortgages. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=arGQ_rKO2ai8&refer=home