Lenders Swamped by Delinquent Mortgages

Washington Post (04/23/08) P. D1; ElBoghdady, Dina
The mortgage industry is having a difficult time responding to the foreclosure crisis because it is unable to keep pace with the number of borrowers who are falling behind on their payments, according to a new report from a coalition of state attorneys general and banking regulators. Based on data from 13 of the biggest subprime lenders from October through January, the statistics reveal that about 50,000 more loans were modified in January than in October but that the number of loans that became delinquent during that time increased by 90,000. Tom Miller, Iowa's attorney general, says the mortgage industry needs to focus more on giving borrowers a better deal than collecting money in order to make more progress on curbing foreclosures. However, Paul Richman, a vice president at the Mortgage Bankers Association, says the Hope Now Alliance study shows that more than 1 million borrowers have avoided foreclosure from July 1 to Jan. 31.