HR

1.) The Fed report you have attached (btw, thank you) has a different definition of seriously deliquent. They see it as loans 60 days delinquent.

“With all of that said, we test the proposition that servicers engage in other loss mitigation actions by looking at the “cure rate.” This is the percentage of loans that transition to current status after becoming 60-days delinquent.”

Our post was concentrating on loans 90+ days delinquent.

2.) The Fed Report is dated.

The Fed report is dated July 6 , 2009. Much has changed since then. Just seven weeks after this report was issued there was a dramatic decrease in cure rates. In a press release dated August 24,2009, Fitch reported:

Delinquency cure rates refer to the percentage of delinquent loans returning to a current payment status each month. Cure rates have declined from an average of 45% during 2000-2006 to the currently level of 6.6%. …

Then in September, Amherst Securities reported that the ‘cure rate’ for 90+ day delinquencies dropped to 0.8%

Cure rates for these distressed loans remain low. Amherst noted a near 0% cure rate of all loans in foreclosure, 0.8% for 90 plus days delinquent, 4.4% for 60 days delinquent and 26.5% for 30-day delinquencies. All told, Amherst expects 12.42% of units (from the 13.54% of properties delinquent and in foreclosure) to eventually liquidate.

Hope this helps explain the broad difference.

Steve