The number of Bay Area homeowners who can't pay their mortgages continued to rise last month, while the number of actual foreclosures declined, the CoCo Times reports. The conflicting news indicates that the Obama administration's loan modification program may be working. The program is designed to help people who can't make their mortgage payments avoid foreclosure. But some experts warn that the program may be just delaying the inevitable.
According to RealtyTrac.com, the number of mortgage defaults was 72 percent higher in the Bay Area in October than it was a year ago. But the number of homes taken over by banks in the foreclosure process was 46 percent lower last month than in October 2008. That indicates that more people are getting help with their loans.
However, some experts warn that the Obama loan modification program may be only delaying the foreclosure process. They predict that 60 to 70 percent of the modified loans will still end up in foreclosure and warn that a flood of foreclosures may cause another steep downturn in the housing market.