Mortgage Foreclosure & Refinance Resource

A new study from the Mortgage Bankers Association says companies provided some kind of assistance to 246,000 troubled borrowers during the third quarter.

The MBA says 63 percent of foreclosure actions in the third quarter were taken against borrowers who were beyond help, for one of the following three reasons:

1. The home was owned as an investment (18 percent).

2. The borrower received help, then fell behind again (29 percent).

3. The borrower could not be reached (23 percent).

(The numbers don’t add up because some homeowners fall into multiple categories.)

If you follow that logic, then only about 149,000 (the remaining 37 percent) of the 384,000 foreclosure proceedings in the third quarter targeted homeowners who could have been helped.

Given that more than a quarter of new foreclosures involve borrowers who received help from the industry, it’s not at all clear that the beneficiaries of that assistance in the third quarter won’t shortly be transferring to the category of “unpreventable” foreclosure.

In this vein, it’s worth looking at how the industry is helping borrowers. Almost three-quarters of the assists involve a “repayment plan” — basically, an agreement for the borrower to keep making their normal payment, but typically deferring missed payments and penalty fees until the end of the loan. Only about 20 percent of the assists involve a “loan modification,” or a reduction in the actual amount of monthly payments. The balance involves the most drastic available measures — a coordinated sale of the home for less than the outstanding debt.