Loan Modfications: 30 Day Re-default Rates are High.

As I have tried to signal in the past, loan modification programs have their own set of limitations and shouldn't be oversold as a solution to all mortgage default and foreclosure problems.

Today, the Comptroller of the Currently released some data on re-default rates for prior loan modifications. The sobering findings: 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,”

Additional material:

• Graph showing re-default rates is HERE.
• Remarks at Housing Forum today are HERE.
• More details coming later : "OCC and OTS Mortgage Metrics Report to be published later this month".
• Could also be other speeches released in next few days.