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UPDATE 2-Few delinquent US home loans being modified-report

The overwhelming majority of borrowers who were seriously delinquent on their home loans in October were not receiving help to prevent the possibility of foreclosure, according to a report published Thursday. Seven out of 10 seriously delinquent borrowers were not exploring ways to prevent foreclosure in October and the lack of interaction between mortgage servicers and homeowners was a major problem, according to the State Foreclosure Prevention Working Group.

A borrower is considered to be seriously delinquent if they are 60 days or more late on their mortgage payment.” A huge amount of borrowers are not getting in contact with their services,” Iowa Attorney General Tom Miller said on telephone press briefing hosted by the Conference of State Bank Supervisors on behalf of the State Foreclosure Prevention Working Group. “Servicers cannot do a modification without the contact and that is obviously a huge challenge,” he said.

Miller organized the working group last year, joining state attorneys general and regulators to work with subprime mortgage loan servicers to reduce foreclosures by encouraging loan modifications and other long-term solutions. However, for those delinquent homeowners in contact with servicers, 45 percent were working toward modifying their home loan. Servicers are increasing their use of longer-term changes to mortgage loans and moving away from their earlier reliance on short-term repayment or forbearance agreements, the report said.

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