High rate of modified loans re-default

According to the Office of the Comptroller of the Currency, 58 percent of loan modifications done in the first quarter of this year have re-defaulted and fell delinquent in the first eight months. In a recent segment on CNBC, Diana Olick, CNBC’s real estate correspondent, said she believes the government should let bad loans go into foreclosure instead of implementing modifications that don’t work, and get people who have good credit to buy up the properties. However, Steve Liesman, CNBC’s senior economics reporter, said widespread mortgage modification is the key to fixing the housing and economic crises.