Foreclosure Prevention Efforts Declining?

Industry measures to keep homeowners out of foreclosure have slipped, according to a report from the State Foreclosure Prevention Working Group, which includes state attorneys generals and banking regulators. "While banks and Wall Street firms continue to report record writedowns of mortgage loan portfolios and securities, the losses do not appear to be flowing down to homeowners in the form of sustainable loan modifications," said Iowa Attorney General Tom Miller, a founder of the working group. The report, the third Analysis of Subprime Mortgage Servicing Performance issued by the group, covers data from subprime mortgage services for February through May of 2008. It said nearly eight of 10 seriously delinquent homeowners are not on track for any loan work-out or loss mitigation assistance. New efforts to prevent foreclosures are on the decline, despite a temporary increase in loan modifications through the second quarter. One out of five loan modifications made in the past year is delinquent. Three hundred thousand subprime loans were in the process of foreclosure as of the end of May. Thirty-eight percent of seriously delinquent subprime loans are in the process of foreclosure, with over 131,000 foreclosures completed on subprime loans in May alone, according to the report.