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Re-Default Rates: Portfolio Loans vs. Loans Serviced for Others (60 or More Days Delinquent)

Fourth Quarter 2008

Also consistent with last quarter's report, the re-default rate for loans serviced for third parties (91 percent of all serviced loans) was significantly higher than the re-default rate for loans held in the servicers' own portfolios (9 percent of all serviced loans).12 This large difference (for example, 70 percent higher after six months) is consistent with the fact that servicers have generally greater flexibility to modify loans held on their own books, especially before default has occurred, than they have with respect to loans serviced for others, which are often subject to more rigid contractual limitations on modification.

Re-Default Rates for Portfolio Loans and Loans Serviced for Others (60 or More Days Delinquent)
Modification DateThree Months after
Modification		Six Months after
Modification		Nine Months after
Modification
On-Book Portfolio18.5%25.9%29.7%
Serviced for Others30.7%44.1%49.5%

 Re-Default Rates for Portfolio Loans and Loans Serviced for Others (60 or More Days Delinquent) 


 12 Of the loans serviced for others, 4.49 percent were held by Freddie Mac (FHLMC), 10.55 percent were held by Fannie Mae (FNMA), 0.16 percent were held by Ginnie Mae (GNMA), and 84.80 percent were held by private investors.


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