Will Future Loan Mod Defaults Increase Short Sale Supply?

Short Sale Supply

A new study by Fitch Ratings predicts that 55-65% of home loans getting modified will end up at least 60 days behind within a year. The percentage is even higher for those in subprimes with 60-day delinquencies predicted at 65-75%, reports consumerist.com.

Loan modifications hold clear value for many homeowners provided the modified payments are
sustainable, but more often than not, reducing the home payments to an affordable level may not be enough to rescue borrowers who are overextended on other credit and expenses,” said Diane Pendley, a managing director at Fitch.


If this estimate is even close to correct, there should be a healthy supply of short sale properties coming to market for the foreseeable future, as the loan mod process only extends the amount of time it takes for the market to bottom out.

This entry was posted in Uncategorized and tagged , , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply