FDIC Sees 638,000 Mortgages Enter Foreclosure in Quarter

Federal Deposit Insurance Corp. researchers have calculated that 638,000 mortgages entered foreclosure in the second quarter while servicers had to deal with a larger crop of newly delinquent loans. Single-family mortgages becoming 60 to 90 days past due in the second quarter totaled 736,000, up from 670,000 in the first quarter and 618,000 in the fourth quarter of 2007. "What this tells us is that the number of problem mortgages is still rising and that finding alternatives to foreclosure remains a policy priority," said FDIC chief economist Richard Brown. There were 1.2 million foreclosures in the first half and it could hit 2 million by year-end, Mr. Brown said. "More needs to be done to modify loans," he added. The FDIC has developed a streamlined loan modification program. FDIC chairman Sheila Bair wants the Treasury Department to fund a loss-sharing loan guarantee program to facilitate more modifications.