New York: CNN reported that state officials released a report on Friday stating that 70% of severely offending sub-prime mortgage borrowers have no sign in keeping their houses. Officials are working with companies and lenders who provide mortgage services to the homeowners and help them avoid losing their properties.
The companies that process payments and accounts play an important role in helping borrowers work out an affordable mortgage from simple plans of repayment to comprehensive modifications in the loan terms, which may include reduction of interest rates or balance payments. A number of sub-prime mortgage loans are adjustable loans which means that their rates of interest may jump after the introductory period.
According to state officials, the number of mortgages being worked on is not as per the rising number of foreclosure properties. “Our collaborative efforts to date have failed to prevent a large number of unnecessary foreclosures,” says Mark Pearce, North Carolina, deputy commissioner of the banks. “We need to find solutions that fit the size of the problem we are facing.”
The report said that the number of borrowers seeking help has increased from approximately 210,000 in October 2007 to 261,000 during January 2008. “We’ve helped more than 1.2 million people through the process. That is a significant accomplishment,” says Paul Richman, vice-president for the government affairs with Mortgage Bankers’ Association. “But we still have a big problem reaching out to borrowers.”
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