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Loan Modification 30+ Re-Default Rates

Third Quarter 2008

For purposes of this report, re-default is measured at both 30 or more days delinquent or in process of foreclosure and 60 or more days or in the process of foreclosure. Monitoring performance subsequent to modification at both 30 and 60 or more days delinquent provides for early identification of loans that may need additional attention to prevent more serious delinquency or foreclosure.

For loans modified in the first quarter of 2008, more than 37 percent of modified loans were 30 or more days delinquent or in foreclosure after three months. After six months, that re-default rate was more than 55 percent. For loans modified during the second quarter, the three-month 30+ day delinquent re-default rate was more than 40 percent.7

Modified Loans 30+ Days Delinquent (30+ Re-default Rate)
 Three Months After ModificationSix Months After Modification
First quarter 2008 loan modifications37.44%55.14%
Second quarter 2008 loan modifications40.52%--

   Total % of Modified Loans 30+ Days Delinquent (% of all loans modified in each quarter) 

 7 Readers should be cautious drawing conclusion about re-default rates using the data from the first and second months after modifications. While these data are early indicators of performance, many factors affect the accuracy of the data during those initial months following modification.


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