Stop Foreclosure Answer

In a recent Blog Post I commented about how frustrated I was with an article in the Wall Street Journal, “Mortgage Modifying Fails to Halt Defaults.” This article commented on a Fitch Report that 65 to 75% of subprime loans which were modified will become 60 days or more delinquent within 12 months after the loan is modified. That means that the people will be facing foreclosure again.

I went on to say that the average person who read this article and did no further research would naturally assume that loan modifications were a total failure. They would never find out the reason there has been such a high rate of people facing foreclosure again after their loans were modified.

Well, it looks like I am not the only one to be upset with the message this article contained. On June 5, the Wall Street Journal contained a letter from Richard Brown, the Chief Economist of the Federal Deposit Insurance Corporation. In his letter Mr. Brown took exception to the article.

Mr. Brown commented that The Wall Street Journal omitted some facts from the Fitch Report. The first was that many of the loan modifications made in 2007 actually raised the monthly payment for the people facing foreclosure. Second this changed for the loan modifications on 2008. In most of the modifications made in 2008 the monthly payment was actually reduced. Third, only 20% of the people who had their subprime loans modified in 2008 have fallen behind on their payments again.

Mr. Brown’s letter confirmed what I had written in that earlier post. The news media is commenting how loan modifications have failed. In the process they are scaring the average person. Yet the reporters are not doing the research to determine the reasons loan modifications may not be working.

It is sad that the Wall Street Journal did not give Mr. Brown’s letter as much prominence as it did the original article on this. I am not sure how many people actually saw his letter.

If you are facing foreclosure or on the verge of falling behind on your mortgage payments, don’t be discouraged by articles and news reports indicating that loan modifications are failing. Please contact a lawyer or an expert in helping people facing foreclosure. Let them know what your situation is. Find out from them what you need to do to protect your family and save your home.

Much Success,

Mark Elkins