More on Foreclosures being more profitable than Mortgage Modifications

Once or twice a month, I see an article that supports the notion that the mortgage servicers profit more from foreclosures than mortgage modifications. This one, published in the Huffington Post, cites more proof than the usual.

When I scour the statistics for mortgage modification success, I know something is up. This theory/notion is as good an idea as any. The lenders certainly are doing nothing to dispel this notion.

Among cited statements in the article:

While homeowners, lenders and investors typically lose money on a foreclosure, mortgage servicers do not, says report author Diane E. Thompson, of counsel at the National Consumer Law Center.

Thompson attributes this to a system of perverse incentives created by lawmakers and rulemakers in the market, like credit rating agencies and bond issuers.

When a homeowner is delinquent on a mortgage that’s been securitized, the servicer must front the late payment to the investors. When a home is foreclosed, the servicer is typically first in line to recoup losses. But if a mortgage is modified, the servicer typically loses money that isn’t necessarily recoverable.

Since this past June, my research and experience shows that the best way to ensure a lender to negotiate in good faith on a mortgage modification is to purchase the REST Report and beat your lender with their own stick. The courts are on the side of the distressed homeowner if you do your due diligence. (4000 successes and zero failures.)

I take issue with the advice to allow bankruptcy judges to enforce mortgage modification negotiations. Bankruptcy judges are already docketed to the max. The homeowner now gets to hire a bankruptcy lawyer to represent them in court. The vast majority of REST Reports never get to court because the bank knows better.

This YouTube video says it all. Go here: How to Get A Beneficial Mortgage Modification Now

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Originally posted 2009-10-22 00:21:20. Republished by Blog Post Promoter

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