Foreclosure prevention efforts, though widely publicized, aren’t keeping pace with the increasing number of delinquent loans, according to a report released today by the State Foreclosure Prevention Working Group.
The report said the combined efforts of servicers and government officials has not translated into meaningful results in terms of foreclosure prevention outcomes, noting that little has changed between January 2008 and October 2007 with regard to subprime servicing data.
The group noted that at-risk borrowers are receiving more help than in the past, but most are still not on track for any meaningful solution.
In fact, seven out of 10 “seriously delinquent borrowers” are at risk of losing their homes because of what the group calls a “systematic failure of servicer capacity to work out loans.”
The data also suggests that servicers are strained because of the increased workload, and two-thirds of loss-mitigation efforts are taking more than a month to complete, further compounding the problem.
On a positive note, the study found that those who do receive assistance are most likely to receive some type of loan modification, which is far more helpful than a typical repayment plan.
The State Working Group commended the loan servicers, but said investors and state officials need to work together to develop a systematic approach while slowing down the foreclosure process to allow for more workouts.