Credit Rating firms forecast 65% to75% of borrowers who receive lower mortgage payments as a result of loan modifications will default within 12 months. These are loan modifications supported under President Obama's Home Affordable Modification Program (HAMP).
The median debt to income ratio using debt payments to pretax income, still averages 64%, well above today's conventional lending standards of 45%.
Experts believe these failures are likely to be high largely because most of the borrowers are mired in credit-card debt, car loans and other obligations, leaving little left over for
The Treasury Department has said even with the modifications it often means little money is left over for food, clothing or such emergency expenses as medical care and car repairs.
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