But Larry Litton Jr., head of Litton Loan Servicing, is equally frustrated. He restructured 2,000 loans last month to help subprime borrowers. This month, he'll do double that number, including changing the loan terms for 1,500 homeowners who have yet to fall behind but who wouldn't be able to afford their looming interest-rate increases.
"We are modifying more loans than we ever have, and despite that, the foreclosure volume continues to increase,
Normally, his company, which collects mortgage payments and handles late payments, helps about 60% of homeowners avoid foreclosure after they fall behind on their subprime mortgages. But with tougher lending standards, falling home prices in many areas and a lot of poorly underwritten loans, he said he can modify only about 45% of the bad loans he has on his books.
The housing crisis, Litton says, "is bigger than what people had originally thought. You're probably looking at a peak in these defaults in the third or fourth quarter of 2008."
Criticism rains down on mortgage industry - USATODAY.com