I have “mortgage modification” fatigue. More specifically, I am tired of reading about government attempts to magically transform a mortgage non-payer into a responsible credit user. The basis for my fatigue is that these attempts mostly fail. Recent data confirms this.
The TransUnion credit score people (I don’t like them either) reports that more than half of the folks who actually received mortgage modifications had fallen behind on their new and improved mortgage payments within 18 months.
TransUnion – being in the business of favoring consumer debt – laughably tried to spin this bad news in a positive way. It said that even these persistent mortgage deadbeats continued to pay on credit card and car debt they obtained after the modification. That shows – according to TransUnion – that these borrowers were able to handle new credit because of the mortgage modification.
Are you kidding me?
Why are these folks running up new debt anyway? Just because they can? Isn’t having to default on – then modify – a mortgage sending an important signal about whether new debt for these people makes any sense at all?
Mortgage default is a financial felony. In comparison, credit card default is a misdemeanor. I am not encouraged by repeat felony offenders just because they commit fewer financial misdemeanors.
Here is a link to the article.
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