Uh-oh: Mortgage Modification Programs are Terribly Ineffective

This is bad news:

Most U.S. mortgages modified by lenders to help keep struggling borrowers in their homes fell back into delinquency within six months, the chief regulator of national banks said.

Almost 53 percent of borrowers whose loans were modified in the first quarter of this year re-defaulted by being more than 30 days overdue, John Dugan, head of the Treasury Department’s Office of the Comptroller of the Currency, said today at a housing conference in Washington.

It's possible that this is just a reflection of how shitty the current mortgage modification programs are (Hope Now, anyone?), instead of evidence that mortgage modification programs can't work at all. The FDIC has been promoting the mortgage modification model it's been using since it took over IndyMac as an unmitigated success, so I'd like to wait for the results from that experiment before I give up on mortgage modification programs entirely. (Although Sheila Bair is a relentless self-promoter, so I'm naturally skeptical of her claims.)

In any event, the OCC's survey is disheartening.