Experienced loan officers know that one of the best predictors of a loan default is a prior loan default. Therefore, the news that mortgage modifications have a very high rate, approaching 60 percent, of new defaults is not surprising.
Since defaulting on a mortgage is the requirement for qualifying for a mortgage loan modification, a high rate of new defaults after modification is normal. Tweaks to the government and the banks' loan modification programs will not decrease the rate of defaults unless mortgage modification programs allow people who did not default to qualify for a modification.
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