State Bank Supervisors: 70% of Troubled Borrowers Don't Get Help

A report from the Conference of State Bank Supervisors claims that seven out of ten seriously delinquent home mortgage borrowers "are not on track for any loss mitigation option." The CSBS's state foreclosure prevention working group, convened last summer by Iowa attorney general Tom Miller, has met with the nation's 20 largest servicers of subprime mortgage loans in an effort to increase communication between servicers and troubled borrowers. The task force found that servicers have increased their use of loan modifications and other home retention options. For those delinquent borrowers who are in communication with their servicer, almost half are working toward a loan modification, the CSBS said. In a conference call with reporters, Mr. Miller said servicers have been receptive to using "enlightened self-interest" to redouble efforts to pursue foreclosure alternatives and streamline the process of creating loan modifications. "Without a blink of an eye they signed onto this proposition."