The New York Times, in a story focused primarily on Countrywide Financial Corp., reports today that borrowers in trouble aren't getting much help from their lenders -- despite the common wisdom that mortgage companies want to avoid the costs of foreclosing if at all possible:

Lenders, government officials and loan servicers, who take in borrowers’ monthly mortgage payments, contend that troubled borrowers everywhere are being helped to stay in their homes by those overseeing their loans. But neither data nor anecdotal evidence supports this view. A recent survey of 16 top subprime loan servicers by Moody’s Investors Service found that for the first six months of 2007, an average of only 1 percent of loans experiencing an interest rate adjustment, or reset, had been modified.

 

I have a story today about the ripple effect of all the incentives -- such as thousands in closing-cost help -- that sellers are offering to buyers:

These discounts are so widespread that some economists think that prices in the Baltimore area -- up about 2 percent so far this year, according to official numbers -- have really declined. "They've probably been falling since late last year or early this year," said Mark Zandi, chief economist at Moody's Economy.com.

 
That's because a seller giveback doesn't affect the reported contract price of a home. If the buyer paid $300,000 but got $10,000 of his closing costs covered by the seller, that doesn't show up in the records as a $290,000 deal.

I've been mentioning the incentive trend in stories for a while, but it finally felt like the time to do a story about the broader economic impact. As one Baltimore seller said in the article, "Everyone is offering incentives."