30+ Re-Default Rates by Investor

Third Quarter 2008

Measured in terms of delinquencies exceeding 30 days, loans held by private investors that were modified in the first quarter had the highest re-default rate at 42.28 percent after three months and 60.76 percent after six months. Loans held on the books of servicing banks and thrifts had the lowest re-default rates at 35.06 percent after three month, and 50.86 percent after six months, compared to loans serviced on behalf of third parties. The lower re-default rate for loans held by servicers may suggest that there is greater flexibility to modify loans in more sustainable ways when loans are held on a servicers’ own books than when loans have been sold to third parties.

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