Countrywide Home Loans uses its possess mating division and categorizes the reasons ground homeowners grappling foreclosures (July 2007)

As the maximal sub-prime give servicer in the country, Countrywide handles payments for 11.90% of the sub-prime market. That’s a large $120 1000000000 worth of loans.

The trend filler of that portfolio is ground I am business the above chart. Normally, accumulation from digit pledgee wouldn’t be sufficiency for a decent sample, but Countrywide is the maximal servicer of loans and it holds that denomination by a longshot.

Countrywide Home Loans interior accumulation shows that meet a tiny proportionality of every bag give defaults are the termination of mortgage evaluate adjustments

According to Countrywide’s mating department, meet 1.4 proportionality of its loans that defaulted in July 2007 defaulted because of "payment adjustment".

That’s a tiny number.

The publically acquirable show also noted the another reasons ground its homeowners defaulted on their mortgages:

A modification in bag income led to 58.3 proportionality of every foreclosures

Medical bills and/or sickness led to 13.2 proportionality of every foreclosures

Divorce led to 8.4 proportionality of every foreclosures

Inability to delude a bag led to 6.1 proportionality of every foreclosures

Death caused 3.6 proportionality of every foreclosures

If we alter the statistic, we encounter that 98.6 proportionality of Countrywide’s sub-prime defaults in July 2007 happened for reasons another than an adjustable evaluate mortgage.

Flash nervy to Dec 2007.

The Dubya Administration declared its organisation to spend limiting sub-prime borrowers from foreclosures by "freezing" their mortgage welfare rates. If Countrywide’s interpret is modify near to existence accurate, the HOPE NOW information module turn to running odourise on a pig.

Instead of chilling sub-prime mortgage welfare rates, it could be argued that a betterway for HOPE NOW to andante the foreclosure evaluate among sub-prime borrowers would be to create a domestic aid grouping specifically for sub-primers, or to illegalise sub-prime borrowers from divorce.

It’s tall (and tongue-in-cheek), but considering the self-reported reasons ground sub-prime mortgage holders choice on their mortgages, upbeat and wedlock are such more relevant.

(Hat tips: Alex Stenback, Peridot Capitalist)

Source Top Subprime Servicers The Wall Street Journal Online Dec 7, 2007

(Image courtesy: SNL Transcripts)