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Mortgage defaults rise but homeowners stay put

More Californians are failing to make their mortgage payments than at any time in the last 20 years, but fewer of them are losing their homes, according to new figures.

The drop in foreclosures follows moratoriums adopted by major banks and mortgage giants Fannie Mae and Freddie Mac. The increase in loan defaults, meanwhile, suggests that rising unemployment and the continuing recession are still claiming fresh victims.

But another factor in the soaring default rate could be that some struggling homeowners are purposely skipping their payments so that they can get their loans refinanced, industry experts say.

Lenders are so backlogged with requests to adjust loan terms that "they focus on the borrowers who already are circling the drain and ignore the people who are keeping up with their payments," said Jeff Lazerson, president of Mortgage Grader, a Laguna Niguel loan broker. complete story

Source: LATimes.com William Heisel

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Posted by Real Estate - Associates on April 30th, 2009 11:23 AMPost a Comment (0)

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