IMPEACH BUSH

Most troubled homeowners whose mortgages were modified are again falling behind on payments, a top banking regulator said on Monday, raising questions about whether policy makers and lenders can successfully help them stay in their homes.

Data from banks show that more than half of loans modified during the first three months of the year were delinquent by 30 days just six months after the terms of the loans were changed, John C. Dugan, the comptroller of the currency, said at a conference in Washington. After eight months, 58 percent were delinquent again.

The rate at which borrowers fall behind payments again — called the re-default rate — appears to be much higher than what previous studies have found. In October, a Credit Suisse study showed that about 30 percent of loans modified at the end of last year were delinquent by 60 days within eight months of the change.

Mr. Dugan said it was unclear why the re-default rates were so high after modifications made by the 14 banks that provided data to his office. He acknowledged that “we have to be careful as we look at this data.” One explanation for the high re-default rate might be that banks were not significantly changing the terms of the loans they modified.

Analysts at Credit Suisse have found that modifications that do not lower borrowers’ monthly payments were more than twice as likely to become delinquent again than changes that reduced payments. Banks like Chase, Citigroup and Bank of America have only recently put more emphasis on lowering monthly payments.

Some loans may also be so poorly underwritten that no modification could help the borrowers stay in homes that they can no longer afford, Mr. Dugan said. That would confirm other studies that show homeowners who become delinquent are much more likely to lose their homes today than in the past.

The Mortgage Bankers Association said last week that 30 percent of homeowners who miss one payment end up in foreclosure a few months later. Historically, only 12 percent to 15 percent fell that far behind and most borrowers were able to catch up, sell their home or strike a better deal with their lender. In California, however, 75 percent of homeowners who miss one payment end up in foreclosure; in Florida, 65 percent who miss a payment do.

A sharp drop in home prices has made it much harder for homeowners to sell their properties for as much as they owe and rising unemployment is putting more borrowers in financial distress.