Home loan modifications not doing the job


Banks hoping to take advantage of the Financial Accounting Standards Board's change to the mark-to-market rule had better tread very carefully. Home loan modifications are not working, according to a report by the Office of Thrift Supervision in today's Washington Post. At least 57 percent of homeowners whose loans were modified missed at least one payment in the nine months after modification, and 35 percent missed at least three payments.

The report also found that an increasing number of borrowers default on their loans before making a single payment, which matches what the FHA found.