Amidst the second quarter earnings season, yesterday brought about a quarterly report of a different kind — this one from industry coalition HOPE NOW, which said that mortgage servicers helped a record number of homeowners avoid foreclosure during the second quarter.
In June 2008, mortgage servicers completed more than 181,000 mortgage workouts for home loans, HOPE NOW reported; and in the second quarter of 2008, mortgage servicers completed more than 522,000 workouts. The industry coalition touted both numbers as exceeding estimates, and the largest number of workouts in any month and quarter since the group began compiling data in July of last year.
All of which is true, but looking underneath the hood at the data, it’s clear that many troubled prime borrowers are getting the short end of the stick relative to their subprime counterparts.
A prime problem
197,033 prime borrowers received some form of loan workout during the second quarter, compared to 324,961 subprime borrowers — a fact that, on its surface, may not surprise. After all, the number of troubled subprime borrowers is greater than the number of troubled prime credit borrowers, right?
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