In June 2009, the number of mortgages delinquent by 90 days or more came close to 3 million. That represents an increase of 160% over the 1.8 million delinquencies in June 2008. Since then the number of delinquencies has ripped to 3.5 million!
The Mortgage Home Assistance Program of February 2009 is the administration's attempt to slow down foreclosures by offering service and mortgage companies money incentives to modify delinquent loans. Treasury released the results of the program through July, shown in the above chart.
The difference in rates of modification are dramatic. For Washingtonians especially, the gap between JPM Chase and Bank of America rates stands out big time - 20% as opposed to 4%! Think back to the shotgun wedding between JPM Chase and WAMU last year and you realize what a deal it was for Chase. Calculations are that Washington Mutual assets were then valued at $307 Billion. Chase paid a grand total of $1.9 Billion in an agreement made overnight between the Fed, headed by Hank Paulson, and the banks. Penny and a half on the dollar. It's not hard to see why Chase is writing down more loans than the competition. The profit margin must be what those collection agencies that buy up bad loans are accustomed to getting. Bank of America bought Countrywide at full value before the sub-prime woes had done their damage. And so they are one of the too-big-to-fail banks forced to continue living on TARP largesse.
For some insight into why other banks and service companies may not by racing into the modification action just yet, see the New York Times piece on how these companies can profit more from foreclosures than modifications.
In case you are shopping for a mortgage or a loan modification, there are many non-profit organizations out there ready to help. I list several on my web page:
http://greengatesonline/carolpearce.aspx
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