Banks/Thrift Mods Better for Their Own Loans?

A new report shows that banks and thrifts are more successful at modifying mortgages they own than the loans they service for other investors and Fannie Mae and Freddie Mac. Only 51% of bank-owned modified loans had missed a payment after six months, compared to 61% for private investors, according to a third quarter mortgage metrics report issued by the Office of the Comptroller of the Currency and Office of Thrift Supervision. The joint report noted that 58% of Freddie modified loans were 30-day past due after six months and 57% of Fannie loans were delinquent. "The lower re-default rate for loans held by servicers may suggest that there is greater flexibility to modify loans in more sustainable ways when loans are held on the servicer's books than when loans have been sold to third parties," the report says. OCC and OTS collected the data from nine national banks and five thrifts with the largest servicing portfolios.