Consumers that are trying to modify their mortgages are carrying, on average, about $19,000 in additional unsecured debt, and this poses a major obstacle to rewriting such loans, according to the Consumer Credit Counseling Service (CCCS).

Speaking at SourceMedia's Mortgage Servicing Conference in Dallas, CCCS president Suzanne Boas said,

"Now, consumers are paying their credit cards before other bills." She noted that consumers are essentially using credit cards for such daily living expenses as food and gas.

Tom Deutsch, deputy executive director of the American Securitization Forum, noted that whatever a servicer does in regard to loan mods "it's critical" that any second liens on the title should not be wiped out.

North Carolina's deputy banking commissioner Mark Pearce reminded the audience that 70% of seriously delinquent homeowners are not involved in any type of loss mitigation process at all.

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