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Home-loan modifications decline

By Bloomberg News
December 30, 2010

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NEW YORK — The number of delinquent borrowers who started home-loan modifications declined in the third quarter as fewer people qualified for easier payment terms, according to the Treasury Department.

Loan servicers started 470,321 modification or payment plans in the three months ended Sept. 30, down 17 percent from the previous quarter and 32 percent from a year earlier.

“You’ll probably see some more stabilization now,’’ said Bruce Krueger, lead mortgage expert for the Treasury’s Office of the Comptroller. “I really can’t forecast whether there’s going to be a continuing decline, but I think we’re going to see more stability.’’

The Obama administration is struggling to meet goals in its foreclosure-reduction plan after the worst housing market collapse since the Great Depression. The number of homeowners who qualified for permanent loan modifications through the government’s main program totaled 504,648 as of November, short of the 3 million target.

Another 1.9 million homeowners started modifications under private lenders’ programs.

Loan modifications declined as more delinquent homeowners lost their properties.