TheRealDeal - High rate of modified loans re-default

According to the federal Office of the Comptroller of the Currency, 58 percent of loan modifications done in the first quarter of this year have re-defaulted, and fell delinquent within the first eight months of the year. Diana Olick, CNBC's real estate correspondent, believes the government should let bad loans go into foreclosure instead of implementing modifications that don't work, and instead get people who have good credit to buy up the properties. However, Steve Liesman, CNBC's senior economics reporter, said widespread mortgage modification is the key to fixing the housing and economic crises.

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