Here's some scary data for Housing Wire.
Using LPS data, for all loans more than 90 days in arrears, the average days delinquent is now at 272 days—up from 204 days in early 2008. For loans in foreclosure, the aging numbers are even more staggering: loans in this bucket average 410 days delinquent, up from 260 days delinquent in early 2008.
Ponder those numbers for just a second. On average, severely delinquent borrowers have gone more than 9 months without making a mortgage payment—and yet foreclosure has not yet started for them. For those borrowers who are in the foreclosure process, it’s been an average of 13.6 months—more than one full year—since they last made any payment on their mortgage.
So, can short sales ride in to save the day for these 7.4m troubled borrowers? What about for the many millions more who are current on their loans, but are underwater on property value and unable to sell? For some, short sales will be an important solution—but don’t kid yourself: the hype currently surrounding short sales and the HAFA program will prove to be short-lived, and REO expertise will be prove to be the key to recovery, as it has been in prior cycles.
Here's some government propaganda regarding the HAMP program (Loan Mods). Check out the chart on page 6. Before mods the average back end DTI was 76.4%! Damn Batman after you pay taxes what's left to buy food and pay utilities. It really does make you wonder what in the hell banks were thinking making these loans. 76 freaking pecent DTI...amazing. And the scary part is the back end DTI after mod is averaging nearly 60%. These people are still one paycheck away from the street, eating Ramen noodles and Hamburger Helper for dinner.
There are some other shocking numbers in the report. All the perment mods got an interest rate reduction, 40% of them got the loan extended, and 27% got a principal forebearance. (not a principal reduction!). You can see that a lot of these loan mods are time bombs unless by some miracle prices bubble up again. The average savings is a little over $500/mo.
Welcome to the Bail Out Generation! (We are the BOGs)