Re-default rates on the Home Affordable Modification Program are approaching 28%, Frank Pallotta, managing partner of Loan Value Group, said this week.
In order to prevent the problem, consumer marketing and finance firm LVG is working hard to maintain a connection between the borrower and the servicer.
As a result, LVG claims it started facing a re-default rate of less than 3% after more than 12 months.
Additionally, LVG was also able to reduce short-sale timelines and lower delinquency and servicing advance rates.
“We will continue to see the trend of high re-default rates for the foreseeable future, unless the mortgage industry begins to explore proactive strategies that assess and re-assess the needs of all borrowers throughout the life of the mortgage,” Pallotta noted.