How California loan ‘workouts’ are working out
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Figures on how many Californians have been able to get their mortgages modified come from today’s Sacramento Bee story, ‘Lenders modified 136,785 mortgages under state deal’:
Lenders that agreed to voluntarily step up loan modifications in a November 2007 agreement with Gov. Arnold Schwarzenegger rewrote terms of 136,785 troubled California mortgages in 2008, the state reported Monday. More than half of loan workouts by year’s end involved lowered interest rates to trim monthly payments and keep people in their homes, the state data show. Such modifications accounted for 58 percent of workouts in December, according to an analysis posted on the state Department of Corporations website. Schwarzenegger, who corralled lenders into the nation’s first voluntary loan agreement 16 months ago, said the results exceeded his goal of 100,000 modifications during 2008.... At least 10 major lenders and several smaller ones report loan workouts to the state as part of the governor’s agreement. Their loans represent ‘easily more than half the market in California,’ said DOC spokesman Mark Leyes. Major participants include Countrywide Home Loans, Carrington Mortgage Services, GMAC Mortgage LLC, Litton Loan Servicing, HomeQ Servicing, Ocwen Loan Servicing and Wilshire Credit. In 2008, California saw 237,131 foreclosures, 2.8 percent of its 8.5 million homes and condos.
Some L.A. Land readers have reported success with loan mods and others, frustration. The story goes on to say lenders are most reluctant to just take the deed in lieu of foreclosure or reduce the principal. Interest rate cuts were the major modification tool, temporary suspension of payments and, in the second half of the year, short sales gained use.
--Lauren Beale
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