The banking industry has proposed modifying millions of mortgages to prevent foreclosure. However, changing home loans doesn't always prevent problems and most often it only delays the inevitable foreclosure. This according to Lender Processing Services, a mortgage payment processor that also tracks 80 percent of the outstanding home loans in the market."Industry evidence indicates that in a majority of instances loan modifications simply delay the timeline from default to foreclosure but don't prevent them from taking place," according to analyists at Keefe, Bruyette and Woods, (KBW) a specialist in financial services. Their analysis of the current mortgage market was gleaned from information provided by Lender Processing Services. More startling, the report states that after mortgages are modified, roughly 25 percent go delinquent again after just one post-modification payment and more than half end up delinquinquent after multiple post-modification payments.
The internal models of Lender Processing Services suggest that the number of foreclosures will continue to rise through 2010 before peaking in 2011, according to the KBW analyists.Information courtesy KBW and Marketplace.com.
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