The Real Deal Miami

Federal loan program not cure-all in FL

Government modifications result in 27 percent default rate
December 02, 2013 12:00PM

foreclosureFor homeowners in Florida, obtaining a loan modification through the federal government is not necessarily preventing future defaults.

The inspector general for the Troubled Asset Relief Program says 27 percent of Florida homeowners who modified mortgages through the Home Affordable Modification Program have once again defaulted on their loans, the Palm Beach Post reported. The national loan modification redefault rate is also around 27 percent. The report projects a $972 million cost to taxpayers from payments to banks and mortgage investors for loan modifications.

To help homeowners avoid losing properties after the housing collapse, the government launched the Home Affordable Modification Program in 2009. Through September, nearly 153,000 Florida borrowers obtained permanent mortgage modifications through the program, which expires at the end of 2015. [Palm Beach Post]Eric Kalis