Fitch: Redefaults Inevitable on Sizable Number of Mods

Even though residential servicers are posting stronger loan modification numbers, a sizable amount of these mortgages could default again within a year, according to a new report from Fitch Ratings. Dow Jones reported that the rating agency's findings reinforce criticism that the government's Home Affordable Modification Program will only result in delaying the inevitable foreclosure filing for mortgagors who cannot afford to remain in homes due to a number of factors—including loss of income, a high level of household debt and reduced property values. HAMP pays mortgage-servicing firms to modify mortgages and find other ways to keep people in their homes. Since HAMP was launched early last year, servicers have been making slow but steady progress with modifications under the program. By balance, about 15% of all residential mortgage-backed securities loans have received some sort of modification through May, up from 10% last September.