Office of the Comptroller of the Currency, Ensuring a safe and sound national banking system for all Americans Site Map | Text Size: S M L

Return to Publications Library
See Past Issues
Contents
BankNet

BankNet
More resources for national banks

HelpWithMyBank.gov

HelpWithMyBank.gov

Get answers to banking questions

Job Seekers

Job Seekers
Join one of the best places to work

Re-Default Rate at Three, Six, Nine, and 12 Months after Modification

First Quarter 2009

Modifications that decreased monthly payments had consistently lower re-default rates, with greater percentage decreases resulting in lower subsequent re-default rates.  While lower payments reduce monthly cash flows, they may also result in longer term sustainability of the mortgage payments.  After 12 months, 37.6 percent of modifications that decreased monthly payments by 20 percent or more were seriously delinquent.  In contrast, 58.8 percent of modifications that left payments unchanged and 56.2 percent of modifications that increased payments were seriously delinquent after 12 months.

Re-Default Rates of Loans Modified in 2008 by Changes in Payment
(60 or More Days Delinquent)24
 Three Months after ModificationSix Months after ModificationNine Months after Modification12 Months after Modification

Decreased by 20% or More

14.7%

24.3%

27.7%

37.6%

Decreased by 10% to Less than 20%

17.3%

28.8%

35.2%

42.1%

Decreased by Less than 10%

19.9%

36.1%

43.0%

47.4%

Unchanged

43.7%

54.4%

55.3%

58.8%

Increased

30.8%

50.0%

57.7%

56.2%

   Re-Default Rates of Loans Modified in 2008, by Changes in Payment 

 24 Data include only those modifications that have had sufficient time to age the indicated number of months. For example, only modifications implemented during the first quarter 2008 have been in effect 12 months. Only those modifications implemented in first and second quarter 2008 have been in effect at least nine months. Only those modifications implemented in first, second, and third quarter 2008 have been in effect at least six months. Loans modified throughout 2008 have all been in effect at least three months.


< previous | next >