The Office of the Comptroller of the Currency and the Office of Thrift Supervision reported that the number of loan modifications increased 17 percent but that 37 percent of modified mortgages were 30 or more days delinquent within just three months and that 55 percent of the modified mortgages were 30 or more days delinquent within six months. Obviously these modifications aren’t putting the brakes on foreclosures and we need to do something different. If this many homeowners are delinquent in paying their mortgage after a loan modification, how many of them are simply delaying foreclosure? The loan modification process needs more oversight so that modified loans are made more affordable for homeowners facing foreclosure.

But don’t expect the mortgage loan industry to quietly allow oversight into how they modify mortgages. For months lawmakers have been fighting for homeowners’ right to modify toxic mortgages in bankruptcy and have faced fierce opposition from the lobbyist representing the mortgage industry. But if we don’t act now the foreclosure crisis will only get worst causing a chain reaction of unpleasant consequences throughout the economy.

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