Many Borrowers Fall Behind Again After Mortgage Modifications More than half of delinquent borrowers who received mortgage modifications were behind on payments again 18 months later, according to a new analysis from the credit reporting company TransUnion. Yet the study also found that borrowers who receive modifications are more likely to continue paying other debt, like auto loans or credit cards, that they obtained after falling behind on their mortgages. The findings come from an analysis of about 5 million mortgages originated before 2008. The loans, from borrowers with similar credit scores, had become at least four months past due from January 2008 to June 2010. Nearly 560,000 of the loans analyzed received modifications from January 2008 to July 2011. Steve Chaouki, group vice president for financial services at TransUnion, said the analysis showed that some borrowers were still able to handle new credit, even after falling behind on a mortgage loan and obtaining a modification. Lenders, he said, should not assume that just because homeowners get a modification, they are an overall bad risk. It may be, he said, that borrowers who are willing to make the effort to get a loan modification are trying to get their finances together and move forward, rather than writing off the situation. It's an indication that the consumer is trying to right their ship. "I view it as positive news for lenders and borrowers," he said of the findings. In contrast with the past, he said, people are more likely to let their mortgage loan become delinquent so they can stay current on credit cards and auto loans. That's probably because people usually need their cars to get to work, he said, and because car values are currently high - unlike many people's homes, which have lost value. "People are making different choices," he said. In the year after a mortgage delinquency, just 6 percent of borrowers who obtained a mortgage modification ended up late on a new auto loan, compared with 11 percent of those who didn't get a mortgage modification. The data also showed that people who fell behind on their mortgage alone remain much better credit risks than those who fell behind on their mortgage and other types of debt. Did you obtain a mortgage modification? Have you been able to remain current on the payments for the home loan and other debt?