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Re-Default Rates of Modified Loans: 30 or More Days Delinquent

Fourth Quarter 2008

The re-default measure of 30 or more days delinquent or in the process of foreclosure is a useful tool for identifying loans early that may need additional attention to prevent more serious delinquency or foreclosure. Not surprisingly, the re-default rates using this measure are higher than those resulting from the 60-or-more-days-delinquent measure. But the trend lines are similar, and the results are consistent—high rates of re-default (approaching 60 percent) and worsening for loans modified in each successive quarter.11

Modified Loans 30 or More Days Delinquent (30+ Re-Default Rate)
Modification DateThree Months after
Modification		Six Months after
Modification		Nine Months after
Modification
First Quarter38.8%50.9%57.4%
Second Quarter44.3%55.9%X
Third Quarter49.7%XX

 Modified Loans 30 or More Days Delinquent (30+ Re-Default Rate) (Percent of All Loans Modified in Each Quarter) 

 11 Because modifications occur throughout the quarter, the last two months reflected in the graph only include those modifications that have aged the indicated number of months. For example, for loans modified in the third quarter, only loan modifications implemented in July are included at five months following modification, and only modifications implemented in July and August are included at four months following modification. This note applies to the re-default graphs showing 60+ and 90+ re-default rates as well.


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