No matter how many news reports say that the economy is improving, there still seem to be no signs that the foreclosure crisis will be over anytime soon. One indicator of continued high foreclosure rates is that there have been so few mortgage modifications.

A new report by Fitch Ratings found that only 36,500 mortgage modifications were completed in December of 2010. That was the number for the whole country. The number was 58% lower than in April 2009, the peak month for mortgage modifications.

The report estimates that up to 70% of risky and subprime loans that have been modified could default again within a year. Other modified loans could also see default rates up to 60%. According to Fitch's report, even mortgage modification will do little to stop foreclosures in the coming year.

Loan modification programs have done very little to turn around the enormous number of distressed mortgage loans.

An Associate Press report said that economic stress increased in December because foreclosures outran slight improvements in unemployment statistics. Fort Lauderdale mortgage options attorneys noted that foreclosure rates rose in Florida.

The AP's Economic Stress Index calculates a score from 1 to 100 based on unemployment, foreclosure and bankruptcy rates. Any county or state with a score over 11 is considered stressed. Florida had the second highest state stress rating, with 16.47. Only Nevada was more stressed at 22.56.

Source: Huffington Post "Mortgage Modifications Failing, Sparking More Economic Stress" 2/8/2011